BGC Partners’ Arm Taps CLS for Enhancing FX Compression Services

The platform is planning to offer new FX solutions as well.

Capitalab, a unit under the BGC Brokers, announced its partnership on Friday with CLS Group, a foreign exchange market infrastructure provider, for enhancing its FX multilateral compression services.

The BGC Partners subsidiary will benefit from CLS’s market data on FX forwards and swaps, which will help to enhance the speed and efficiency of the broker’s FX portfolio.

“We are delighted to consolidate our presence in FX through our services agreement with CLS, which will enable previously unexplored possibilities,” Capitalab Co-founder, David Bachelier said. “Combining Capitalab’s multi-product technology with CLS data allows us to offer the market new FX solutions and unique optimization of several risk metrics, including notional, margin, and counterparty risks.”

BGC Brokers is regulated by the UK’s Financial Conduct Authority (FCA), and its division Capitalab is offering portfolio compression services with interest rate swaptions, interest rate swaps, caps and floors, equity options, FX and FX Options.

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“As highlighted by the Bank for International Settlements’ most recent Quarterly Review, FX market systemic risks are growing, leading to an increasing need for multilateral optimization and risk-reduction technique,” Gavin Jackson, Co-founder of Capitalab, said.

Enhancing the FX Market

CLS Group has a wide presence in the FX market. It offers market intelligence services and provides processing and settlement for the FX players.

Most recently, fintech firm Finastra tapped CLS’s payment netting services to meet the demand from the buy-side clients for a centralized infrastructure, managing post-trade processes.

CLS Global Product Head, Keith Tippell, said: “CLS settlement members continue to focus resources on optimization and risk mitigation. Our unique position at the center of the FX market enables us to collaborate with specialized service providers, like Capitalab, for the benefit of our common client base.”

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