CLS welcomes Sumitomo Electric Industries to CLSSettlement as a third-party participant
First Japanese manufacturing company to settle currency trades via CLSSettlement as a third-party
Tokyo/ London/ New York: CLS, a market infrastructure delivering settlement, processing and data solutions, announced today that Sumitomo Electric Industries (SEI) is the first Japanese manufacturing company to access CLSSettlement as a third-party participant.
SEI is ranked in the Fortune Global 500 and has a diverse global business portfolio in the automotive, infocommunications, electronics, environment and energy, and industrial materials segments. The company is settling its FX transactions in CLSSettlement via its third-party service provider, Sumitomo Mitsui Banking Corporation (SMBC), supported by Bloomberg’s FX Confirmation Matching Service (CMS) post-trade processing technology.
SEI’s participation marks a significant milestone for the Japanese FX market and highlights the continued growth in CLSSettlement third-party participants in Japan. This momentum has been driven by a number of factors: since 2018, the overall number of Asia Pacific third parties (regional/third-party banks, funds, corporates and non-bank financial institutions) participating in the settlement service increased by 15% while respective average daily gross values settled increased by 17%. In that same time period, the average daily gross values settled by third-party corporates in the region also increased by over 75%.
Takamasa Matsubaya, Senior Vice President of Transaction Products Development Dept., SMBC, said, “We are delighted to provide SEI access to CLSSettlement. There is increasing appetite amongst our corporate clients to mitigate settlement and operational risk and we are pleased to be able to support our clients in achieving this.”
Tod Van Name, Global Head of FX Electronic Trading, Bloomberg, commented, “Our CMS solution provides post-trade connectivity between execution and settlement for institutions that are not SWIFT-enabled, allowing them to access CLSSettlement. SEI's adoption of the suite of Bloomberg FX solutions optimizes their treasury workflow and achieves advanced automation while meeting the internal market standard with significantly reduced risk.”
Margaret Law, Head of Client Development Asia Pacific CLS, added: “Large, multinational corporations are increasingly looking for effective, robust and sustainable solutions to enhance the way they manage risks, cash management, liquidity demands and efficiencies in their multicurrency operations. This latest development highlights the continued strong demand from the non-bank community for CLS’s services.”
Japan is one of the world's leading export countries and cross-border capital flows (project finance and M&A etc) are very active. Accordingly the corporate FX turnover in Japan is one of the largest globally (average daily volume of USD22.3 billion),2 and has increased exposure to a wider range of market participants. Adopting global best practices for risk mitigation and improving operating efficiencies remains a key priority for all participants.
1 Fortune Global 500 is an annual list complied and published by Fortune magazine of the global companies leading the world's development: https://fortune.com/fortune500/
2 Triennial Central Bank Survey of Foreign Exchange and Over-the-counter (OTC) Derivatives Markets in 2019 (revised December 2019): https://www.bis.org/statistics/rpfx19.htm