Articles tagged by CLS
CLS Group has
announced that Wells Fargo has joined as a settlement member.
Wells Fargo joins 64 other settlement member
banks in becoming a direct participant in CLS’s settlement and risk mitigation
system – which settles approximately $5 trillion a day on ...
The average daily
input value submitted to CLS was $5.19 trillion in June, up 12.6% from the
previous month and up 3% year-on-year.
Average daily input
volume submitted to CLS, combining the settlement and aggregation services, was
1.16 million in June.
This represents a
CLS and Quandl, a data platform for economic and financial data, have made standardised and aggregated FX trade reports available via subscription.
This new service will allow CLS to distribute its set of executed trade data to the broader market ...
Daiwa Securities Group has joined CLS as its newest settlement member.
Daiwa Securities, one of the largest financial institutions in Japan, joins 65 other financial institutions in becoming a direct participant in CLS’s settlement and risk mitigation system – which settles ...
The average daily input volume of instructions submitted to CLS,
combining the settlement and aggregation services, fell 9.7% month on month in
July, standing at 1,050,046.
However, year on year volumes were less changed,
decreasing by just over 1.7%.
Meanwhile, the average daily ...
Data from CLS shows that its average daily input volumes for August were down 15.9% month-on-month, which is consistent with a broader decline in trading activity across the multibank FX platforms last month.
The average daily input volume submitted to CLS, combining the settlement and aggregation services, was 883,368 in August, down from 1,050,046 the previous month and the 1,170,313 recorded in August 2015.
However, average daily input values were flat – down just 0.2% month-on-month to $4.68 trillion from $4.69 trillion in July 2016.
CLS Group is planning to release a payment netting service, CLS Netting, for buy and sell-side institutions’ FX trades that are settled outside of its settlement service.
Firms will have the choice of connecting to the service via existing channels or by utilising Distributed Ledger Technology (DLT).
CLS claims that the global FX market is limited by the lack of a standardised payment netting process for trades not settled within CLS. The firm claims that in many cases institutions are forced to intervene manually to complete the process, leading to inconsistent and bespoke approaches to netting throughout the market, which in turn results in higher costs and increased intra-day liquidity demands.
As leverage requirements make FX exposures a bigger pain point for the banks, many are looking towards compression services to solve for this. Galen Stops looks at how these services work and what they could mean for the industry.
One of the responses by global regulatory bodies to the 2008 financial crisis was to require banks to hold more capital against their financial exposures, creating a bigger buffer to protect them against adverse market conditions.
Capital constraints have widely been cited as a reason for declining activity in some markets and liquidity events in other, therefore it is not surprising that compression services, whereby offsetting trades are netted off against one another to reduce the notional amount on banks’ balance sheets, have found favour amongst banks and major dealers.
The average daily input value of matched instructions submitted to CLS was $4.99 trillion in September, up 6.6% from August and up 3.7% year-on-year.
This contrasts with the volumes reported by EBS and Thomson Reuters – the two biggest OTC platforms to report their volumes – both of which were up month-on-month, but down year-on-year in September.
Meanwhile, the average daily input volume submitted to CLS, combining the settlement and aggregation services, was 1,038,025 in September, up 17.5% from the 883,368 recorded the previous month. However, this was a 4% decrease from the 1,081,045 recorded in September 2015.
CLS Group has completed its project to upgrade its settlement members to a new member gateway and market infrastructure (MI) channel.
CLS’s settlement members include 66 of the world’s largest financial institutions, which are direct participants in CLS. Over 21,000 third-party clients around the world also access CLS’s services indirectly through settlement members
The group says that it worked with each of its settlement members, as well as Swift, to build and integrate a new member gateway into each bank’s core architecture.
CLS was another market mechanism to receive a boost from the US election, with data from the settlement services provider showing the number of instructions submitted and the value settled both rising strongly.
CLS says the average daily input volume submitted, combining its settlement and aggregation services, was 1,167,833 up 15.0% from 1,015,928 in October 2016
The average daily input value submitted to CLS was $4.99 trillion up 1.4% from $4.92 trillion in October 2016.
The volume of instructions rose 21% year-on-year and the value settled was 13.2% higher than November 2015.
Data from CLS reinforces that released earlier this month by trading platforms by indicating a month-on-month decline but a year-on-year rise in FX volumes.
CLS Group has signed a memorandum of understanding (MOU) with the National Institution for Financial Development (NIFD) in China.
The MOU defines close cooperation between the two institutions on research and broadening awareness relating to FX, payments and settlement to support the healthy development of the Chinese economy and renminbi internationalisation.
CLS’s head of Asia, Rachael Hoey, and NIFD chairman, Professor Li Yang, signed the MOU on Monday, January 23.
“China’s financial development would be enhanced by integration with global financial markets and infrastructure to support its important and growing role in the world,” says Hoey.
CLS Group (CLS) has introduced two new membership models, affiliated settlement and non-shareholder settlement.
These two new categories will exist alongside the existing shareholder and central bank settlement membership categories.
The affiliated settlement membership category allows institutions to have more than one entity within a corporate group become a settlement member. This category is aimed at institutions seeking to segregate their FX businesses to manage their own CLS participation and correspondent banking relationships.
It also removes the reliance on internal clearing and intergroup limits, helps settlement members meet their regulatory ring-fencing obligations and facilitates recovery and resolution planning.
CME Group has changed its rules regarding FX delivery, putting a cap on the amount of deliverable FX that firms can clear via wire transfer when trading deliverable currency products on its platforms.
Currently, under CME Rule 730 deliverable currency futures contracts are required to be physically delivered through CLS where both the trading unit and price increment currency are supported by CLS delivery procedures, unless the clearing firm’s delivery exposure in any single contract is not expected to exceed $25 million.
CLS Group has appointed Gaynor Wood to the role of general counsel.
Wood succeeds Alan Marquard, who has led both CLS’s legal division and the Corporate Strategy and Development (CSD) division, and will now focus exclusively on the latter.
In her new role, Wood reports into David Puth, CEO of CLS, and becomes a member of CLS’s Executive Management Committee.“Gaynor has in-depth knowledge of all aspects of the legal framework supporting CLS, as well as legislation and regulatory guidelines affecting our members and ecosystem participants,” says Puth.
Settlement services provider CLS Group and Nex Group’s TriOptima say that counterparties have eliminated $1 trillion in gross notional value from their outstanding FX forward and swap portfolios using the TriReduce CLS FX Forward Compression Service.
The service offers regular compression cycles to reduce operational, credit, and counterparty risk, and enhance capital efficiency. The firms say participation has grown steadily, with the last two cycles reducing notional principal by more than $200 billion, a trend that both companies say they expect to continue.
After two years of endless hype, Galen Stops looks at whether 2017 will be the year that distributed ledger technology broadly starts getting put into production within mainstream financial services.
Last year saw numerous firms producing proof-of-concepts (POC) regarding the potential application of distributed ledger technology (DLT), issuing whitepapers about the technology and hosting “hackathons” and other events to discuss and promote its use within financial services.
Profit & Loss covered the major developments around DLT last year, but the editorial team started expressing frustration towards the end of the year regarding the disparity between the PR and subsequent press coverage surrounding DLT and the actual amount of tangible projects being put into production using this technology.
CLS has announced plans to expand its bilateral payment netting service, due to launch in 2018, to support more than 140 currencies at launch as opposed to the 24 currencies initially planned.
In a release issued today CLS says that this decision was taken in response to demand from market participants. Coverage will now include all currencies associated with jurisdictions not on an official black and grey or sanctions list that would prevent CLS from conducting business with that jurisdiction.
The average daily traded volume (ADV) submitted to CLS was $1.6 trillion in March, up 6.7% from February. This figure also represents a 9.6% increase from the $1.46 trillion ADV recorded for the same period a year ago.
At $462 billion in ADV, spot volumes were up 8.1% month-on-month, but down 1.3% year-on-year for March.
In contrast, swap volumes in March reached $1.04 trillion ADV, a 14% increase from the year before and a 6.2% increase from February.
Meanwhile forward volumes, at an ADV of $95 billion, were up 3.3% month-on-month and up 17.3% year-on-year, in March.
Data from CLS shows that the first round of the French presidential election caused a much stronger reaction in the spot FX market than the second round.
The data shows that there was a significant spike in volumes following the first round of voting. Ahead of the vote, polls were showing a statistical tie for the top four candidates, and therefore the result was much more uncertain.
Before polling was suspended by law on Friday, 21 April 2017, Bloomberg’s composite of French polls showed Emmanuel Macron in the lead with 24.5 % and Marine Le Pen in second place with 22.5% of the vote
The average daily volume (ADV) submitted to CLS in April was $1.52 trillion, down 5% from the ADV of $1.6 trillion that it reported in March.
The ADV of spot FX trades submitted to CLS was $435 billion in April 2017, down 5.8% month-on-month and down 8% year-on-year.
The ADV of swaps trades submitted to CLS was $988 billion in April, down 4.9% from the previous month, but up 1.2% compared to April 2016.
Similarly, the ADV of forwards trades submitted to CLS was down month-on-month, but up year-on-year. CLS reported an ADV of $93 billion for forwards products in April, down 2.1% from March, but up 24% compared to April 2016.
Fund management institutions can now access the CLS system in Korea for the first time via CLS third-party service provider, HSBC.
This announcement builds on the earlier adoption of CLS participation in Korea by other non-bank financial institutions (NBFIs), including a number of leading securities brokers. Third-party participation globally accounts for approximately 22% of the total value settled in CLS and there was a 12% increase in the number of third-party participants using the service in the Asia Pacific region in 2016.