Tokio Marine & Nichido Life Insurance and Nisshin Fire & Marine Insurance, two of the Tokio Marine Holdings group companies, have indirect access to CLSSettlement as third party participants.
Since Tokio Marine & Nichido Fire Insurance joined CLSSettlement last year, the settlement processes of the three group companies are now aligned. While several insurance companies in Japan have independently adopted CLSSettlement to mitigate settlement risk, this is the first time that a group of multiple insurance companies has worked together to adopt CLSSettlement group-wide.
This development highlights the continued growth in market-side adoption of CLSS settlement in Japan and the growing commitment to improve the overall efficiency and security of the foreign exchange market across the Asia-Pacific.
By aligning all group companies, the benefits of the CLSS arrangement can be maximized, resulting in improved management efficiency and reduced costs across the group.
Additionally, by using CLSSettlement in conjunction with an FX trading platform and matching and confirmation service, participants benefit from simplified data processing from execution to settlement, which eliminates time-consuming manual processes. CLSSettlement also provides simplified and standardized processes for foreign exchange operations, minimizing tasks such as settlement value reconciliation, deposit balance adjustments and settlement failure management.
The Japanese sell-side can also benefit from the improved foreign exchange operations, funding efficiency and settlement risk mitigation provided by CLSSettlement. Enhancing operational efficiency could enable remote working relative to the tidying CLSS workflow and facilitate more flexible work arrangements through digitized workflows and reduced manual intervention.
Akira Kato, Head of Client Engagement Asia Pacific at CLS, commented:
“We are pleased to welcome Tokio Marine Holdings group companies as third party participants in the CLSSettlement. As global FX trading and investing expands every year, we remain committed to making the FX community safer and more cost-effective for our clients. We welcome the growing buy-side participation in CLSSettlement.”
CLSSettlement also supports FX market participants’ compliance with Principle 35 of the Global FX Code. CLS will continue to support Japanese market participants in their adherence to the Global FX Code by promoting the CLSS arrangement on a group basis for multiple institutions.