BNY Mellon and ING have agreed to join CLS’s bilateral payment netting service for more than 120 currencies, CLSNet. They are the latest participants to join the growing CLSNet community, which includes eight of the top 10 global banks.
CLSNet standardizes and centralizes post-trade processes across a wide range of trade types, including intraday trades and NDFs, which helps reduce risk and achieve greater operational efficiency for a wide range of currency flows. As settlement risk in the foreign exchange market continues to be a focus, especially in emerging market currencies and other developing market segments, participants are looking for ways to effectively mitigate risk through automated post-trade services such as CLSNet.
CLSNet has seen record growth this year, highlighting industry support for the service. The average daily notional value of net settlements on CLSNet has consistently exceeded USD 115 billion over the past 12 months and on December 20, 2023 reached a record daily notional value of USD 445 billion netted.
Commenting on the new additions to CLSNet, Lisa Danino-Lewis, Chief Growth Officer, CLS said:
“We are delighted that BNY Mellon and ING are joining the growing community of CLSNet users and will benefit from the risk mitigation, operational efficiency and liquidity advantages that the service offers. 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 foreign exchange industry.”
Jason Vitale, Head of Global Markets Trading, BNY Mellon added:
“We are constantly identifying the latest solutions that will improve our customers’ experience throughout the commerce lifecycle. By joining CLSNet, this will enable us to provide clients with improvements in intraday liquidity and execution efficiency.”
Robbert Zee, Head of FM Operations, ING added:
“CLSNet provides the functionality to strengthen and standardize post-trade processes across the global spectrum of currencies. As the largest Dutch bank with significant global operations, our participation in the service will be integral to our ability to improve operational efficiency and reduce risk for currencies that are not currently eligible for CLSS settlement.”
CLSNet also supports FX market participants’ compliance with the updated Global FX Code, in particular Principles 35 and 50, as all trading instructions sent to CLSNet are validated and matched to the pre-defined 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 net payment obligations. By automating the clearing process through a centralized platform, users benefit from greater operational efficiency and increased risk mitigation for currencies that are not currently eligible for CLSS settlement.