Sumitomo Electric Industries (SEI) has become the first Japanese manufacturing company to access CLS Settlement as a third-party participant.
The company is settling its FX transactions via its third-party service provider, Sumitomo Mitsui Banking Corporation (SMBC), supported by Bloomberg’s FX Confirmation Matching Service (CMS) post-trade processing technology.
CLS says that SEI’s participation “marks a significant milestone for the Japanese FX market and highlights the continued growth in CLS Settlement third-party participants in Japan”, adding that the momentum has been driven by a number of factors: since 2018, the overall number of Asia Pacific third parties (regional/third-party banks, funds, corporates and non-bank financial institutions) participating in the settlement service increased by 15% while respective average daily gross values settled increased by 17%. In that same time period, the average daily gross values settled by third-party corporates in the region also increased by over 75%.
“We are delighted to provide SEI access to CLS Settlement,” says Takamasa Matsubaya, senior vice president of transaction products development department, at SMBC. “There is increasing appetite amongst our corporate clients to mitigate settlement and operational risk and we are pleased to be able to support our clients in achieving this.”
Tod Van Name, global head of FX electronic trading at Bloomberg, adds, “Our CMS solution provides post-trade connectivity between execution and settlement for institutions that are not Swift-enabled, allowing them to access CLS Settlement. SEI’s adoption of the suite of Bloomberg FX solutions optimises their treasury workflow and achieves advanced automation while meeting the internal market standard with significantly reduced risk.”
Meanwhile, Margaret Law, head of client development Asia Pacific, at CLS, says, “Large, multinational corporations are increasingly looking for effective, robust and sustainable solutions to enhance the way they manage risks, cash management, liquidity demands and efficiencies in their multicurrency operations. This latest development highlights the continued strong demand from the non-bank community for CLS’s services.”