Chong Hing Bank has become the second Chinese bank to access CLSSettlement as a third-party participant via CLS settlement member, UBS.
CLSSettlement is increasingly popular in the Asia Pacific (APAC) region, with a 31 per cent increase in participation of APAC third parties since 2018.
The Hong Kong Monetary Authority recently updated its Supervisory Policy Manual, further aligning with the supervisory guidance set by the Basel Committee on Banking Supervision for managing risk standards. Adhering to these global and local practices is supported by CLSSettlement.
CLSSettlement settles the payments on both sides of an foreign exchange (FX) trade simultaneously, mitigating FX settlement risks.
Chan Yun Ling, head of treasury and markets at Chong Hing Bank, says: “The move represents the increasing FX trading volume of Chong Hing Bank, with the continuing support from Yuexiu Group, as well as the vibrant business opportunities for the Greater Bay Area.”
Lisa Danino-Lewis, chief growth officer of CLS, comments: “With the growth of FX trading in many Asian currencies, market participants are becoming increasingly aware of settlement-related risk and are using CLSSettlement to mitigate this risk, while at the same time benefiting from enhanced operational efficiencies. Participating in CLSSettlement also supports Chong Hing Bank’s adherence to global and local best practices, such as the FX Global Code.”
