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Articles tagged by settlement

Wells Fargo Joins CLS as Settlement Member 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 ...
CLS Volumes Surge in June 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 20% ...
Daiwa Securities Joins CLS as Settlement Member 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 ...
CLS Volumes Ease in July 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 ...
CLS to Launch Netting Service Using Blockchain Technology 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.
CME Amends Rules for Physical Delivery of FX 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.
Breaking the Mold Noble Bank International recently launched with a new business model aimed at alleviating the current credit constraints in the FX market. Will it be a “game changer” for the industry? Galen Stops takes a look. If every new product or service launch that claimed to be “game changing” actually was, the FX industry would be a dizzying place to work in, such is the popularity of this phrase and its variant forms. As a result, it was hardly surprising to see Noble Bank International (Noble) hail its new real-time, post-trade FX service as “industry changing”, when its official launch was announced last month. And yet, if the Noble model manages to gain significant traction within the FX industry, it could have a significant impact on how the market operates.
RMB Internationalisation: Opportunities and Challenges Celent has released a report today that documents the progress being made in the internationalisation of the renminbi (RMB), and outlines the opportunities that this represents for market participants, as well as the challenges it presents. Discussing how investment managers can benefit from RMB internationalisation, the report says that they should consider adopting new strategies to respond to greater short-term volatility in the currency. It notes that investment managers have traditionally looked to gain from China’s one-way currency appreciation and hold bonds till maturity. “But Chinese regulators’ abandonment of circuit breakers and other protective measures means traditional expectations of regulatory intervention may not hold going forward, opening up more opportunities for short-term price fluctuations,” says the report.
Nex Launches Automated Netting Service 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.
Five More Banks Settle Benchmark Claims Five banks have filed to settle a class action lawsuit brought against them over FX benchmark manipulation claims. According to papers filed in New York, the settlement agreements resulted from “arm’s-length negotiations between highly experienced counsel and fall within the range of possible approval”. Morgan Stanley has agreed to pay $50 million; Societe Generale $18 million; Standard Chartered Bank $17.2 million; Royal Bank of Canada $15.5 million; and Bank of Tokyo-Mitsubishi UFJ $10.2 million. All five banks continue to deny wrongdoing.
P&L Talk Series with John Betts Profit & Loss talks to John Betts, CEO of Noble Bank International, about the demand for more innovation in FX and the potential impact of a shift towards real-time settlement. John Betts: The fact that people are not just receptive to innovation but starting to demand it is a really good sign for the industry. I think previously everyone was too focused on the front office, but now there’s a recognition that the back office needs innovation too. One challenge that I feel still exists, however, is that the back office is not something that’s very well understood, so when solutions are being proposed to back office problems it can be difficult for firms to distinguish between solutions that actually address these problems and ones that are shiny new objects that allow firms to tick an “innovation” box.
CLS to Launch Same-Day Settlement CLS Group plans to launch a same-day settlement service in the second half of 2018, subject to regulatory approvals. The new service, CLSNow, will offer bilateral, same-day, payment-versus-payment gross settlement in CAD, CHF, EUR, GBP and USD, with plans to extend the service to additional currencies in the future, based on client demand. The aim is to enable counterparties to optimise the use of available liquidity in the same-day market, while mitigating settlement risk. Currently, some of CLS’s largest clients have in excess of 10% of their daily euro business being transacted on a same-day basis, and the expectation is that the launch of CLSNow will further facilitate the growth of this same-day market.