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HSBC joins as a member of the cross-currency swaps service of CLS and IHS Markit



Forex settlement provider CLS and analytics and solutions provider IHS Markit have announced that HSBC has joined the cross-currency swaps service. With the latest addition, the settlement members live on the service are now nine.

Lisa Danino-Lewis, Global Head of Sales at CLS, said:

We are delighted to welcome HSBC as the latest participant to join our cross-currency swaps service. As more settlement members join the service, they will benefit from significant operational and funding efficiencies. CLS has long advocated for greater PvP adoption to mitigate FX settlement risk, and by increasing cross-currency swap flows to CLSSettlement, HSBC’s participation will help to achieve that.

Growing cross-currency swap flows to CLSSettlement supports the policymakers and regulators’ call to rise payment-versus-payment (PvP) adoption across the industry for settlement risk mitigation. The rising trend of increasing global trading of currencies that do not have PvP settlement mechanisms has been prominent in recent years. International standard setting bodies, such as the CPMI and the Global Foreign Exchange Committee, are addressing this by exploring ways to increase the level of PvP settlement in the FX market

HSBC

The cross-currency swaps service is an extension of CLS’s PvP settlement service. It also uses the MarkitSERV trade confirmation platform to enable members of CLSSettlement to send their cross-currency swaps for settlement. The cross-currency swap flows are multilaterally netted against all other FX transactions in CLSSettlement, which results in a meaningful reduction in daily funding requirements for clients and significant liquidity optimization benefits across the industry.

Peter Altero, Global Head of Rates Business Development at IHS Markit, added:

Peter Altero, IHS Markit
Peter Altero

The cross-currency swaps settlement service is a good example of how service providers can work together to create a more efficient FX settlement system. The addition of HSBC to the community of global financial institutions connected by the MarkitSERV network for cross-currency swap settlement shows that the industry supports such collaborations, while at the same time reaping cost benefits and mitigating risk.

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HSBC joins as a member of the cross-currency swaps service of CLS and IHS Markit

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