CLS welcomes Tokio Marine Holdings group companies to CLSSettlement

3 min read
30 November 2023

Tokio Marine & Nichido Life Insurance and Nisshin Fire & Marine Insurance indirectly access CLSSettlement as third-party participants

Tokio Marine & Nichido Life Insurance and Nisshin Fire & Marine Insurance, two of Tokio Marine Holdings group companies, are indirectly accessing CLSSettlement as third-party participants. Since Tokio Marine & Nichido Fire Insurance joined CLSSettlement last year, the three group companies’ settlement processes are now aligned. While several insurance companies in Japan have independently adopted CLSSettlement to mitigate settlement risk, this is the first time that a group of several insurance companies have worked together to adopt CLSSettlement across the whole group.

This development highlights the continued growth in CLSSettlement adoption by the buy side in Japan and the growing commitment to improving the overall efficiency and safety of the FX market across Asia Pacific.

By aligning all group companies, the benefits of CLSSettlement can be maximized, resulting in enhanced management efficiency and cost reduction across the entire group.

In addition, by using CLSSettlement in conjunction with an FX trading platform and matching and confirmation service, participants benefit from streamlined data processing from execution through to settlement, which eliminates time-consuming manual processes. CLSSettlement also delivers streamlined and standardized processes for FX operations, minimizing tasks such as settlement value reconciliation, deposit balance adjustments and management of settlement failures.

“We welcome the growing buy-side participation in CLSSettlement.”

Akira Kato
Head of Client Engagement, Asia Pacific

The sell side in Japan can also benefit from the streamlined FX operations, funding efficiency and settlement risk mitigation that CLSSettlement provides. Enhancing operational efficiency could enable remote working with respect to CLSSettlement workflow and facilitate more flexible working arrangements through digitalized workflows and reduced manual intervention.

Akira Kato, Head of Client Engagement Asia Pacific at CLS, commented: “We are pleased to welcome the Tokio Marine Holdings group companies as third-party participants to CLSSettlement. As FX global transactions and investments expand every year, we remain dedicated to making the FX community safer and more cost effective for our clients. We welcome the growing buy-side participation in CLSSettlement.”

CLSSettlement also supports FX market participants’ adherence to Principle 35 of the FX Global Code.1 CLS will continue to support Japanese market participants with their adherence to the FX Global Code by promoting CLSSettlement on a group basis for many organizations.

1 Principle 35 states:
Whenever practicable, Market participants should eliminate Settlement Risk by using settlement services that provide payment-versus-payment (PVP) settlement. Where PVP settlement is not used, Market Participants should reduce the size and duration of their Settlement Risk as much as practicable. ...

If a counterparty's chosen method of settlement prevents a Market Participant from reducing its Settlement Risk (for example, a counterparty does not participate in PVP arrangements or does not agree to use obligation netting), then the Market Participant should consider decreasing its exposure limit to the counterparty, creating incentives for the counterparty to modify its FX settlement methods or taking other appropriate risk mitigation actions.




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