State Street has started providing access to CLS’s risk-mitigating foreign exchange (FX) settlement platform, CLSSettlement, for a Japanese-domiciled pension fund as a pilot fund.
This is the first pension fund to migrate its FX settlement to CLSSettlement in Japan.
According to State Street, the decision to adopt CLS is the result of a coordinated effort across the industry, led by the Financial Services Agency of Japan along with Bank of Japan, to provide access to CLSSettlement to the Japanese buy-side community.
This announcement comes after Japanese-domiciled funds gained access to CLS as third-party participants in 2018.
Commenting on the development, Margaret Law, head of client management for the Asia Pacific at CLS, said: “We look forward to working with State Street to facilitate settlement and
operational risk mitigation associated with FX trading for pension funds in Japan.”
She added: “We are seeing an increase in participation in CLSSettlement from pension funds and the buy-side more generally, globally and across the region, as the buy-side becomes increasingly aware of the risks associated with currency settlement outside of CLS.”
“This latest development reflects our growing presence in Japan across the buy-side. It is also a testament to our strategy of reducing risk and creating efficiencies for a diverse range of third-party clients while bolstering the stability of the FX market.”
Mark Hamilton, president and representative director of State Street, commented: “We look forward to bringing our extensive global experience to support the Japanese buy-side community as it accesses settlement risk mitigation through CLSSettlement.”
He added: “This is an important development for the market that we believe will lead to
increased interest, and adoption, from trust funds domiciled here.”
.jpg)