CLS Group Launches PVP Settlement Service for Cleared FX Derivatives
- CLSClearedFX will be open to multiple counterparties with LCH the first to go live with the service.
CLS Group, a leading provider of risk mitigation and operational services for foreign exchange dealers and institutions, on Tuesday launched a PVP settlement service specifically designed for OTC cleared FX derivatives, dubbed “CLSClearedFX.”
The PVP, short for payment-versus-payment, is a settlement principle that increases the reliability of settling cleared FX products and assumes that central counterparties (CCPs) and their clearing members are meeting their responsibilities simultaneously.
CLSClearedFX will be open to multiple counterparties with London Stock Exchange's clearing arm, LCH is the first to go live with the service. It will apply to a range of FX products and cross-currency swaps providing capital, margin, Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term, Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and other benefits to industry participants.
The new solution will operate independently of CLS’s PvP FX settlement service CLSSettlement. Still, clients can better manage their counterparty risks arising from over the counter transactions and enhance their operational efficiency in settling those cleared FX derivatives in a coordinated manner.
CLSClearedFX is the company’s further step towards the development of new solutions that help mitigate FX settlement risk to the cleared FX market. Last week, CLS Group unveiled that its new post-trade monitoring and reporting tool, CLSTradeMonitor, which leverages its extensive experience of risk mitigation and operational services provided for FX dealers and institutions, has gone live.
Commenting on the launch, Alan Marquard, Chief Strategy and Development Officer at CLS, said: “Through the launch of CLSClearedFX, CLS is taking its proven track record in mitigating FX settlement risk to the cleared FX market. Bringing together the market infrastructures that mitigate counterparty and settlement risk, the two biggest risks in OTC cleared FX products, is a powerful step forward for the market.”
Paddy Boyle, Global Head of ForexClear at LCH, added: “Offering physical settlement of cleared OTC FX products is a landmark moment for the market. We are delighted to be collaborating with CLS in pioneering in this area, delivering efficiencies and reducing risk for participants in the FX market.”
CLS Group, a leading provider of risk mitigation and operational services for foreign exchange dealers and institutions, on Tuesday launched a PVP settlement service specifically designed for OTC cleared FX derivatives, dubbed “CLSClearedFX.”
The PVP, short for payment-versus-payment, is a settlement principle that increases the reliability of settling cleared FX products and assumes that central counterparties (CCPs) and their clearing members are meeting their responsibilities simultaneously.
CLSClearedFX will be open to multiple counterparties with London Stock Exchange's clearing arm, LCH is the first to go live with the service. It will apply to a range of FX products and cross-currency swaps providing capital, margin, Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term, Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and other benefits to industry participants.
The new solution will operate independently of CLS’s PvP FX settlement service CLSSettlement. Still, clients can better manage their counterparty risks arising from over the counter transactions and enhance their operational efficiency in settling those cleared FX derivatives in a coordinated manner.
CLSClearedFX is the company’s further step towards the development of new solutions that help mitigate FX settlement risk to the cleared FX market. Last week, CLS Group unveiled that its new post-trade monitoring and reporting tool, CLSTradeMonitor, which leverages its extensive experience of risk mitigation and operational services provided for FX dealers and institutions, has gone live.
Commenting on the launch, Alan Marquard, Chief Strategy and Development Officer at CLS, said: “Through the launch of CLSClearedFX, CLS is taking its proven track record in mitigating FX settlement risk to the cleared FX market. Bringing together the market infrastructures that mitigate counterparty and settlement risk, the two biggest risks in OTC cleared FX products, is a powerful step forward for the market.”
Paddy Boyle, Global Head of ForexClear at LCH, added: “Offering physical settlement of cleared OTC FX products is a landmark moment for the market. We are delighted to be collaborating with CLS in pioneering in this area, delivering efficiencies and reducing risk for participants in the FX market.”