CLS has announced that Afore Citibanamex, Mexico’s second largest pension fund and a founding organisation in the country’s Administration System for Retirement Fund, has become the first Mexican pension fund to access CLS’s payment-versus-payment (PvP) FX settlement service, CLS Settlement, as a third-party participant.
Mexico, along with Canada and the US, leads the way among the 22 largest pension funds globally in terms of growth in assets under management. In 2019, Mexican pension funds managed $237 billion, up 7.3% from $117 billion in 2009. This growth has drawn the attention of regulators. For example, the proposed revisions to Mexico’s Retirement Savings Systems Law state that FX settlement operations should use PvP where possible, demonstrating an increased focus in the region on settlement risk mitigation and the adoption of industry best practices.
CLS says that by participating in CLS Settlement, Afore Citibanamex is well-positioned to adopt the FX Global Code.
“CLS Settlement will enable us to mitigate risk and increase operational efficiency,” says Gabriela Cueva, treasury head, Afore Citibanamex. “By helping us to reduce operational costs and open access to a wider pool of counterparties, our decision to join CLS Settlement as a third-party participant ultimately will create opportunities for us to grow our business.”
Alan Marquard, chief business development Officer, CLS, adds, “The pensions industry globally, and in Mexico specifically, is undergoing significant growth. Pension fund managers are becoming increasingly aware of the growth in settlement-related risk and are using CLS Settlement to mitigate this risk, while at the same time benefitting from enhanced operational efficiencies.”