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Trade aggregation will extend to offshore Chinese renminbi (CNH), Russian ruble (RUB), Turkish lira (TRY) and Polish zloty (PLN)
CLS Group, a provider of risk mitigation and operational services for the global foreign exchange (FX) market, and NEX Optimisation, a NEX Group (LON:NXG) business which helps clients reduce complexity and optimise resources across the transaction lifecycle, just announced the expansion of the CLS Aggregation Services LLC (CLSAS) to support the aggregation of non-CLS currencies.
CLSAS is a trade aggregation service for FX spot transactions and addresses the operational and capacity challenges experienced by banks as a result of high frequency FX trading. A joint venture between CLS and NEX Optimisation’s Traiana business, the service works by aggregating matched FX trades to a single trade which in the case of the CLS currencies is then processed through to settlement in CLS. This results in reduced operational risk and enhanced capacity for the banks’ middle and back office systems, which is especially beneficial for participants on peak volume days.
The expansion of the service to include the aggregation of matched FX trades for offshore Chinese renminbi (CNH), Russian ruble (RUB), Turkish lira (TRY) and Polish zloty (PLN), each against the US dollar (USD) and euro (EUR), will provide significant operational efficiencies and risk mitigation benefits to a broader section of the market. The aggregated trades that include these four non-CLS currencies are not eligible for settlement in the CLS settlement service.
Mike Lawrence, Chief Administrative Officer for Foreign Exchange and Local Markets for Citibank, said:
Adding non-CLS currencies to the CLS Aggregation Service is another significant enhancement for participants and extends crucial operational and risk efficiencies from the service to other highly traded currency pairs.
Alan Marquard, Chief Strategy and Development Officer at CLS, added:
The expansion is an important development which will help our customers address additional operational and capacity challenges while further strengthening the value of this joint venture to the FX market.
Joanna Davies, Managing Director at Traiana, concluded:
We are pleased to continue to support this valuable joint venture and expand the CLS Aggregation Service. The aggregation of additional currency pairs will further reduce payments, improve operational efficiencies and provide participants with additional tangible savings on settlement and infrastructure costs at a time when resources are scarce.