Deutsche Bank, Mashreq and Standard Chartered are to onboard CLSNet, CLS’s standardised, automated bilateral payment netting calculation service for approximately 120 currencies.
They will join the growing CLSNet community of global and regional banks to further standardise and centralise post-trade processes in an effort to reduce risk, enhance efficiency and improve liquidity for foreign exchange (FX) market participants.
All trade instructions sent to CLSNet will be validated and matched up to the pre-determined cut-off times between counterparties for each currency.
This ensures that only matched trade instructions are included in the automated net calculation and that there is a single common record of the net payment obligations, says CLS.
By automating the netting process via a centralised platform, users benefit from greater operational efficiency and increased risk mitigation for currencies that are not currently eligible for CLSSettlement, CLS adds.
Commenting on the mandates, Lisa Danino-Lewis, chief growth officer at CLS, says: “The addition of Deutsche Bank, Mashreq and Standard Chartered demonstrates the appeal of CLSNet to all market participants exploring ways to mitigate settlement risk, reduce operational costs and optimise liquidity for their post-trade FX trading processes.
“Given the sharp focus on settlement risk mitigation across the industry, CLS is collaborating with market participants to further evolve CLSNet and to facilitate adoption for a wide range of participants.”
Paul Scott, managing director, financial markets operations at Standard Chartered, comments: “We are delighted to be part of the growing network exploring with CLS risk mitigation via automated payment netting calculations, while providing an enhanced settlement offering for our clients and benefiting from significant operational efficiencies.”
