CLS announces growth of 2.5% from new business in its FX settlement service in 2018
More than 90% of CLS growth comes from buy-side participation
CLS, a market infrastructure group delivering settlement, processing and data solutions, today reported that in 2018 it experienced a 2.5% (USD130 billion in average daily settlement volume) increase in new business in its FX settlement service (CLSSettlement), resulting from efforts to encourage broader adoption of CLSSettlement.
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 new business growth, together with additional volume as a result of increased volatility in the FX market as a whole, has contributed to a 12% increase overall in average daily gross volume in 2018 compared to 2017.
The industry drivers leading to the increased adoption of CLSSettlement among the buy-side include not only the need to mitigate the settlement risk associated with trading FX, but also the requirement to improve operational efficiency, deliver high service levels, and ensure appropriate levels of risk management. In recent years, buy-side firms have become acutely aware of the inherent risks and operational inefficiencies associated with trading and settling FX transactions and have therefore become more active in managing those risks.
In addition, other industry initiatives such as the introduction of the FX Global Code have raised awareness of the need to adopt a best practice approach to settlement and post-trade processing among the buy-side, therefore driving adoption of CLSSettlement.
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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