CLS Group Reveals Upbeat Metrics About FX Settlement Business

More than 90% of the growth came from the buy-side.

CLS Group has reported a 2.5 percent growth, or $130 billion in average daily volume, in new business across its FX settlement service thanks to broader adoption of CLSSettlement solution in 2018.

Geopolitical fears and other events also helped spur volatility, which ultimately facilitated a stronger year with a 12 percent increase in terms of average daily gross volume in 2018 compared to the year prior.

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“More than 90% of this growth came from the buy-side, and the average daily gross volume settled by the buy-side was up by 18% from 2017,” the company said.

One of the most notable spots of CLS’s H1 2018 report was its CLSSettlement business, with the asset’s the amortization period being reduced, which will continue to impact on its future profitability for a number of periods. However, the accounting practice reflects CLS’ strategic decision to replace and modernize the underlying technology platform that supports CLSSettlement.

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On completion of this multi-year project, CLSSettlement will use a new platform that the company believes will enable more efficiency, multi-session capability, and adhere to the industry standards to support its future goals.

CLS New Initiatives

The milestone comes as part of a broader strategy that aims to shake off CLS’ image as a traditional settlement services provider. To date, most of the updates to CLS products were enhancements of existing services intended to make the offering more efficient.

Instead, the company, which was formed in 2002 to reduce FX settlement risks, recently has been keen to promote itself as a provider of innovative products, including post-trade risk management, aggregation and netting solutions.

CLS Group said the new additions would help participating institutions to drive process efficiencies such as optimizing intraday liquidity, enabling real-time awareness of currency and counterparty exposures, and reducing operational and credit risk.

Commenting on the growth figures, Joe Ziccarelli, Head of Sales at CLS, said: “A key part of CLS’s growth strategy has been to be more actively engaged with the buy-side to help drive wider participation in CLSSettlement. Our latest growth figures prove this strategy is working. We hope to further build our buy-side community with the recent launches of solutions to improve post-trade processing, such as CLSNet and CLSTradeMonitor. These solutions allow buy-side participants to access CLS directly in order to benefit from operational process efficiencies and risk mitigation.”

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