CLSNet Community Grows

With settlement risk still high on the agenda and the looming challenge of T+1 intensifying efforts to streamline post-trade processes, CLS has announced that BNY Mellon and ING have joined its bilateral netting calculation service CLSNet.

CLSNet standardises and centralises post-trade processes across a range of trade types, including same-day trades and NDFs, which the utility says helps to reduce risk and achieve greater operational efficiency for a broad range of currency flows. It adds that the service experienced record growth in 2023, with the average daily notional value of net calculations in CLSNet consistently exceeding $115 billion. On 20 December 2023 it reached a record daily notional of $445 billion netted.

Trade instructions sent to CLSNet are validated and matched up to the pre-determined cut-off times between counterparties for each currency. This ensures that only matched trade instructions are included in the automated net calculation and that there is a single common record of the net payment obligations. By automating the netting process via a centralised platform, CLS says users benefit from greater operational efficiency and increased risk mitigation for currencies that are not currently eligible for the main CLS Settlement service.

“BNY Mellon and ING are joining CLSNet’s growing community of users and will benefit from the risk mitigation, operational efficiencies and liquidity advantages that the service delivers,” says Lisa Danino-Lewis, chief growth officer at CLS. “In addition to banks, CLSNet is directly accessible to most market participants, including funds, corporates and non-bank financial institutions, making its benefits widely available to the FX industry.”

Jason Vitale, head of global markets trading, BNY Mellon, adds, “We are continuously identifying the latest solutions that will enhance our clients’ experience across the trade lifecycle.  By joining CLSNet, this will enable us to provide clients with improvements in intraday liquidity and execution efficiency.”

Meanwhile, Robbert Zee, financial markets operations lead and ING, says, “CLSNet provides the functionality to strengthen and standardise the post-trade processes across the global currency spectrum. As the largest Dutch bank with significant global operations, our participation in the service will be integral to our strategy to further improve operational efficiency and reduce risk for same-day currencies and currencies that are not currently eligible for CLS Settlement.”