BOCHK / CLSNet
Following the implementation of CLSNet, BOCHK has significantly reduced the number of payments required and benefited from enhanced intraday liquidity.
General Manager, Bank-wide Operations
Bank of China (Hong Kong) Limited.
Industry issue:
Industry shortfalls in automation and standardization, across ASEAN markets, limit the efficient netting of associated FX payments, with counterparties having to reach a bilateral agreement before proceeding.
Settling individual payments bilaterally on a gross basis left BOCHK exposed to operational and liquidity risks.
Our solution:
CLSNet has helped facilitate BOCHK’s plans for growth throughout ASEAN by enabling them to reduce the amount of funding required. By joining the service and netting payments based on CLSNet’s calculations, CLSNet can help clients reduce the amount of funding required to settle trades on a daily basis.
For CNH FX transactions, which is a significant growth area for BOCHK, CLSNet enables BOCHK to centralize information about its FX exposure, funding and liquidity requirements. This improves liquidity management, and therefore helps support business growth.
Client benefits:
- Promotes business growth by enabling clients to enhance intraday liquidity and reduce credit risk
- Reduces operational risk
- Automates manual counterparty netting processes
- By settling net amounts calculated by CLSNet instead of gross amounts, clients can mitigate settlement risk and reduce their funding obligations and number of payments