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CLS/ICAP joint venture launches CLS Aggregation service for global FX markets

Friday 29th January 2010

By Mike Jones

CLS Group and Traiana, an ICAP company, have announced that a joint venture to provide trade aggregation services to participants active in the over-the-counter FX market has gone live, heralding a new chapter in operational risk reduction and banking industry collaboration.

They say the service will reduce operational risk, lower post trade costs and rationalise and consolidate legacy post-trade processes throughout the global FX markets. Only aggregated trades will need to be processed and settled in CLS, providing settlement risk elimination whilst alleviating the processing burdens on participating banks by 90+% . Operating within the CLS regulatory framework, the supporting technology for the system is provided by market-standard Traiana Harmony.

The FX market has undergone dramatic growth in terms of volumes traded and the expansion of its community which now includes hedge funds, algorithmic traders, and retail and institutional participants, many of whom are prime brokerage clients of the banks. The joint venture demonstrates continued innovation and forward thinking and further strengthens the FX market’s global infrastructure.

The founding eight banks who have already committed to the joint venture are: Bank of America, Credit Suisse, Citigroup, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley and Royal Bank of Scotland.

Rob Close, Chief Executive Officer of CLSAS said: "Since the announcement in April, there has been widespread support for the service which is endorsed by the eight founding financial institutions. This marks one of a number of steps from CLS Bank to further provide high quality risk reduction and processing efficiency solutions for the FX community. The Joint Venture with Traiana leverages essential core competences of both institutions and we look forward to a very successful partnership."

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