Capitolis and CLS in Collaboration

Financial optimisation resource provider Capitolis has unveiled a collaboration with CLS that integrates the data from the settlement infrastructure provider into the Capitolis SaaS platform.

In case anyone has been taking the Covid isolation guidelines too seriously, the next 20 months sees a huge number of new firms dragged into the UMR (uncleared margin rules) regime, meaning capital optimisation is going to become a very big thing. The threshold above which firms are captured, is due to drop in September 2021 from $750 billion to $50 billion, before dropping again to just $8 billion in September 2022. Since the initial launch in 2016, the threshold has dropped in $750 billion chunks from $ 3 trillion, so inevitably a lot more firms are going to come “in scope” by September 2022.

This means that the deal between Capitolis and CLS should make life a lot easier for those firms signed up with Capitolis – it also represents another useful outlet for what seems to some to be the fastest growing part of the CLS business, inevitably in this day and age, data.

The key, as outlined by Capitolis CEO and founder Gil Mandelzis, is the community aspect. Mandlezis says, “We are building a growing community of financial institutions that will allow these firms to collaborate and optimise their financial resources. Our alliance with CLS, one of the most trusted and formidable market infrastructures, will help us to create new opportunities for collaboration and move us closer to achieving our vision – to make markets safer, healthier and more efficient.”

Just a few months ago a survey was released by State Street suggesting that a huge percentage of the buy side was not ready for UMR. Far be it for The Full FX to be cynical, but if the markets follow their usual pattern, they will continue to protest their inability to hit the deadline, meet stubborn resistance from authorities that have already bent once and delayed the rules, and the desperately turn to their providers for a last minute solution.

If this does happen, we may well see the full coming of age of the fintech sector…