Deutsche Bank, Mashreq, StanChart onboarding to CLSNet
CLS today announced that Deutsche Bank, Mashreq and Standard Chartered are at various stages of onboarding to CLSNet, a standardized, automated bilateral payment netting calculation service for approximately 120 currencies. They will join the growing CLSNet community of global and regional banks, which includes seven of the top ten global banks.
CLSNet standardizes and centralizes post-trade processes across the global currency spectrum and in doing so reduces risk, enhances efficiency and improves liquidity for a growing network of FX market participants.
Using CLSNet also helps FX market participants adhere to the FX Global Code – the industry’s global principles of good practice for the FX market. In particular, using the service supports adherence to Principles 35 and 50, as all trade instructions sent to CLSNet are 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. By automating the netting process via a centralized platform, users benefit from greater operational efficiency and increased risk mitigation for currencies that are not currently eligible for CLSSettlement.
“CLSNet will enable us to not only mitigate risk and improve efficiency, but also optimize liquidity and reduce funding requirements for our front office. This is an exciting proposition that will deliver significant benefit for our institution and the broader FX ecosystem. Participating in CLSNet also supports Mashreq’s adherence to the principles of the FX Global Code,” says Mark Edwards Group Head of Operations, Mashreq.
“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. We also support efforts to address systemic risk in the broader FX market, and so welcome the opportunity to collaborate with CLS to achieve this”, says Paul Scott Managing Director, Financial Markets Operations, Standard Chartered.