It is an old saw in the FX industry that firms respond to customer demand and with algo usage on the increase for firms executing FX trades, inevitably eyes have turned to XTX Markets with the question, ‘will it also enter the market for algos?’ As one of the biggest FX market makers such questions […]
CLS’s new payment netting service based on distributed ledger technology, CLSNet, has gone live with Goldman Sachs and Morgan Stanley.
In a release issued today, CLS says that six additional participants from North America, Europe and Asia have committed to joining the service, although the only one it names is Bank of China (Hong Kong), and that the onboarding of several other market participants is planned in the next few months.
CLSNet has been designed to standardise and increase the levels of payment netting in the FX market for trades not settling in CLSSettlement. By standardising and automating the calculation of payment netting, CLSNet aims to reduce costs for market participants and increase liquidity in FX markets. The service was built in conjunction with IBM and runs on the Linux Foundation’s Hyperledger Fabric blockchain framework.
NEX Optimisation (Nex) has launched a fully automated settlement netting service to streamline the bilateral settlement netting process for market participants.
The service will automate settlement netting of over-the-counter FX trades and will expand to all asset classes in the future.
Settlement failure rates are estimated at approximately 3% for the $1.5 billion that is settled on a daily basis between clients and their dealers. The new service will eliminate the manual process of netting between clients and their dealers by applying an API to communicate with the systems and reconcile payments for clients, banks and custodians.
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.
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.
SimCorp says it has enhanced its existing partnership with FX Connect to provide SimCorp Dimension users with full foreign exchange netting capabilities.
SimCorp leverages FX Connect’s cross-currency netting capabilities to enable its clients to block, net and subsequently compress large, multi-currency, multi-value date blotters.
With integration to the order manager module of there firm’s Dimension, SimCorp’s clients can access an automated end-to-end FX execution process, which allows them to create operational efficiencies while at the same time reducing trading costs.