Global Evolution / CLSSettlement / CLSTradeMonitor
Head of Operations
Global Evolution
Global Evolution, a European investment manager, accesses CLSSettlement indirectly through its custodians, who are CLS settlement members.
Founded in 2007, Global Evolution manages emerging and frontier market strategies for a range of institutional investors globally.
Global Evolution endeavored to streamline its post-trade operations, which required numerous manual communications instructing payments and providing pre-advices to counterparties.
Market challenges
Settlement risk is one of the most significant risks in the FX market. To settle an FX transaction, counterparties must exchange principal (the value of the trade) in two currencies. Settlement risk is the risk that one party to an FX transaction delivers the currency it sold but doesn’t receive the currency bought from its counterparty, resulting in a loss of principal.
Without an automated settlement system that simultaneously settles underlying FX transactions, FX market participants become exposed to this risk and also experience operational and liquidity inefficiencies.
Also, the compression of timelines following the move to T+1 securities settlement in North America highlights the need for real-time visibility of trade status to facilitate timely matching and settlement of trades and minimize operational risk. The ability to effectively monitor trade status in near real-time is crucial for the orderly functioning of the FX market.
The solution
To address these challenges, Global Evolution is using CLSSettlement and the companion product CLSTradeMonitor to streamline its settlement process, reduce manual intervention and minimize errors.
“We look forward to continuing to streamline our FX trading and settlement processes. By maintaining this collaborative approach, we can ensure ongoing efficiency and accuracy.”
Senior Operations Officer
Global Evolution
Global Evolution accesses CLSSettlement indirectly through its custodians, mitigating settlement risk through the unique payment-versus-payment (PvP) system that simultaneously settles payments on both sides of an FX trade. Global Evolution also benefits from CLSSettlement’s centralized platform and approach to multilateral netting, which streamline trading operations and improve liquidity management while eliminating the need for different processes for different custodians that participate in CLSSettlement.
CLSTradeMonitor, a post-trade monitoring and reporting tool, provides Global Evolution with a consolidated single portal to view all trade instructions submitted to CLSSettlement across all custodians and counterparties in near real-time. This enables Global Evolution to view trade exceptions and monitor trade status to ensure timely matching and settlement of trades through CLSSettlement.
Using both solutions also reduces the need for manual intervention with counterparties. Global Evolution no longer needs to agree on netting figures before settlement or manually instruct payments, resulting in an automated, low touchpoint process.