CLS and IHS Markit have announced that Goldman Sachs has joined their cross-currency swaps settlement service, bringing the number of settlement members to eight.
The service is an extension of CLS’s payment-versus-payment (PvP) settlement service and uses the MarkitServ trade confirmation platform to allow CLS Settlement members to send their cross-currency swaps in for settlement. The cross-currency swap flows are multilaterally netted against all other FX transactions in CLS Settlement, resulting in what the firm says is a “significant reduction in daily funding requirements for clients and considerable liquidity optimisation benefits across the industry”.
“Becoming a participant of the cross-currency swap service provided by CLS and IHS Markit helps us to further mitigate settlement risk, and we expect to see further operational and funding efficiency benefits as more counterparties join the service,” says Richard Chambers, global head of short macro trading at Goldman Sachs. While Keith Tippell, head of product, at CLS, adds, “Demand has never been higher from market participants for risk mitigation, liquidity optimisation and post-trade efficiency. Further, this demonstrates the benefits we can deliver to our clients by leveraging our unique position as a financial market infrastructure in the FX marketplace and collaborating with established service providers that share the same client base, such as IHS Markit.”
Meanwhile Chris Jackson, managing director, IHS Markit, says, “Our collaboration with CLS is a powerful example of service providers working together to make the swaps market more efficient. As the community of global financial institutions connected by the MarkitServ network continues to grow, the addition of Goldman Sachs to the cross-currency swaps settlement service demonstrates the industry’s ongoing support for such initiatives.”