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CLS Aggregation Services, LLC (CLSAS) is an industry solution that provides a trade compression service to reduce operational risk caused by high frequency FX trading.
Over the last few years, the FX market has undergone dramatic growth in traded volumes, improved trading technology and expanded participation, which now includes hedge funds, algorithmic traders and retail and institutional participants.
This unique industry solution is a further example of collaboration among FX market leaders to reduce operational risk and further strengthen the FX market’s global infrastructure. Specifically, CLSAS provides the following:
- Reduced market risk
- Trades submitted from front office or risk management systems are matched in near real-time, before aggregation occurs
- Unmatched trades are identified within minutes, and rejected after two hours
- Reduced operational risk
- Matching and trade compression reduces the risk of errors in middle and back office systems
- Middle and back office staff have fewer trades to monitor and can focus on the higher value, manually booked trades
- Standardized post-trade, pre-settlement delivery
- Standardized legal agreements and processes
How CLSAS Works
The service works by compressing matched FX trades to a single aggregate trade which is then processed through to settlement in CLS. The service accumulates all buys and all sells in a currency pair over an agreed period between two trading parties.
CLS is responsible for the aggregation service which operates within the CLS regulatory framework and leverages existing back office and CLS settlement processes. The technology infrastructure is provided by Traiana.
CLSAS is a joint venture between CLS Bank and Traiana, Inc., an ICAP company. It is 51% owned by CLS Bank and 49% owned by Traiana.