CLS Group (CLS) and NEX Optimization (NEX), forex risk management and operational services providers, announced that the CLS Aggregation Services LLC (CLSAS) will begin supporting non-CLS currencies.
CLSAS offers trade aggregation services for forex spot transactions, as well as addressing the challenges experienced by institutions such as banks due to high frequency trading. The collaboration between CLS and NEX Optimization’s Traiana business has matched forex trades bundled as a single trade, then processed and settled in CLS. The advantages are mitigated risk and improved capacity for the banks.
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The new currencies will be the Chinese renminbi (CNH), Turkish lira (TRY), Russian rouble (RUB), and Polish zloty (PLN), which will be traded against the U.S. dollar (USD) or euro (EUR). Aggregated trades that will include any of the four non-CLS currencies will not be settled by the CLS.
“Another significant enhancement”
Mike Lawrence, Chief Administrative Officer for Foreign Exchange and Local Markets at Citibank, commented that the new additions to the service will improve the banks’ experience: “Adding non-CLS currencies to the CLS Aggregation Service is another significant enhancement for participants and extends crucial operational and risk efficiencies from the service to other highly traded currency pairs.”
In May, CLS approved HSBC Korea as a third-party services provider, which translates to fund managers being granted access to the CLS system in South Korea for the very first time. Samsung Securities had been the first non-bank financial institution (NBFI) to receive access to the CLS system, which made an important mark on the Korean foreign exchange market and CLS.