Citi and HSBC Adopt Capitolis Novation

The major banks adopted the FX options novation service at the end of 2018 giving a big boost to the

Citi and HSBC are the first FX prime brokers to go live on Capitolis Novation. The product developed by Capitolis, has been one of the hottest products to make its debut last year.

The two leading banks went live on the platform in December 2018 in what is a major step to deliver a new service to the market alongside Capitolis. The fintech company, led by none other but Gil Mandelzis is streamlining the novation process, enabling a much more streamlined solution to service the needs of both sell and buy sides of the market.

The global head of OTC clearing and head of foreign exchange prime broking at Citi, Christopher Perkins, emphasized that the bank remains focused on capital and operational efficiencies to its clients. “We are excited to partner with Capitolis since its inception to drive capital optimization and reduce costs through automated FX options novation processing,” Perkins said.

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Capitolis Novation is automating a significant amount of manual work in both FX prime broking and bilateral trading and therefore delivers capital efficiencies. Another positive outcome is the reduction of risk exposures at banks which helps them meet regulatory capital requirements.

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“The FX Prime Brokerage novation tool will provide access to liquidity and credit in the FX options market, while allowing clients to offset their positions across their network of banks,” Vincent Bonamy, global head of Global Intermediary Services at HSBC, said.

The CEO of Capitolis, Gil Mandelzis, elaborated that both Citi and HSBC have partnered with Capitolis to only begin the wider adoption of the company’s solution for FX novation.

“We are grateful for them for helping us bring it to market with their incredible support, technical expertise and collaboration to shape what we believe will be a meaningful solution to address a key constraint in the capital markets,” Mandelzis elaborated.

The CEO of Capitolis also shared that both banks used the service extensively across all their client activity. The growth of the community and the rapid addition of new functionalities to the product signal continued interest from the industry.

“We believe for the market to continue to grow in a sustainable way it needs new methods of thinking and infrastructure which this solution addresses,” Mandelzis stated.

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