Wall Street giant Goldman Sachs has joined the cross-currency swaps settlement service of CLS and IHS Markit.
Announced on Thursday, the service is an extension of CLS’s payment-versus-payment (PvP) settlement service and uses the MarkitSERV trade confirmation platform to allow members to send their cross-currency swaps into CLSSettlement for settlement.
The cross-currency swap flows are multilaterally netted against all other FX transactions in CLSSettlement, resulting in a significant reduction in daily funding requirements for clients and considerable liquidity optimization benefits across the industry.
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“Becoming a participant of the cross-currency swap service provided by CLS and IHS Markit helps us to further mitigate settlement risk, and we expect to see further operational and funding efficiency benefits as more counterparties join the service,” Richard Chambers, global head of Short Macro Trading at Goldman Sachs, said.
Used by the major global banks
Goldman has become the eighth member of the settlement service which is already being used by top global lenders.
“We are delighted to welcome Goldman Sachs as the latest participant in our cross-currency swaps settlement service,” Keith Tippell, Head of Product at CLS, said. “Demand has never been higher from market participants for risk mitigation, liquidity optimization and post-trade efficiency. Further, this demonstrates the benefits we can deliver to our clients by leveraging our unique position as a financial market infrastructure in the FX marketplace and collaborating with established service providers that share the same client base, such as IHS Markit.”
“Our collaboration with CLS is a powerful example of service providers working together to make the swaps market more efficient. As the community of global financial institutions connected by the MarkitSERV network continues to grow, the addition of Goldman Sachs to the cross-currency swaps settlement service demonstrates the industry’s ongoing support for such initiatives,” Chris Jackson, Managing Director of IHS Markit, added.