Japanese pension fund starts to access CLSSettlement

Buy side uptake of CLSSettlement continues

26 February 2019

Tokyo/London/New York: CLS, a systemically important financial market infrastructure group delivering foreign exchange (FX) settlement, processing and data solutions, today announces that State Street Trust and Banking Co., Ltd. has started providing access to CLS’s risk mitigating FX settlement platform (CLSSettlement) for a Japanese-domiciled pension fund as a pilot fund.

This is the first pension fund to migrate its FX settlement to CLSSettlement in Japan, which is one of the world's dominant currency trading centers and is fundamental to the APAC FX community.

The decision to adopt CLS is the result of a coordinated effort across the industry, led by the Financial Services Agency of Japan along with Bank of Japan, to provide access to CLSSettlement to the Japanese buy-side community. This follows the announcement of the first Japanese-domiciled funds gaining access to CLS as third-party participants in 2018.

Commenting on the development, Margaret Law, Head of Client Management, APAC, CLS said, "We look forward to working with State Street to facilitate settlement and operational risk mitigation associated with FX trading for pension funds in Japan. We are seeing an increase in participation in CLSSettlement from pension funds and the buy-side more generally, globally and across the region as the buy-side becomes increasingly aware of the risks associated with currency settlement outside of CLS.

“This latest development reflects our growing presence in Japan across the buy-side. It is also testament to our strategy of reducing risk and creating efficiencies for a diverse range of third-party clients while bolstering the stability of the FX market.”

Mark Hamilton, President and Representative Director of State Street Trust and Banking Co., Ltd., added: "We look forward to bringing our extensive global experience to support the Japanese buy-side community as it accesses settlement risk mitigation through CLSSettlement. This is an important development for the market that we believe will lead to increased interest, and adoption, from Trust funds domiciled here.”

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