CLS OMWG Update 180912

Trusted market
solutions
CLS OMWG Update
12 September 2018
cls-group.com
All views or opinions expressed in this document are CLS’s and This document is for the exclusive use of the recipient and © 2018. CLS Group. All Rights Reserved.
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information included herein does not constitute investment or or in part, without the prior written permission of CLS Group. of CLS UK Intermediate Holdings Ltd.
financial advice and should not be relied upon as such.
CLS Classification: Public Information

Our product suite
Today we leverage our experience and substantial market intelligence to address
our clients’ wider settlement, processing and data needs.
Settlement Processing Data
Reduce risk, improve Bringing together Achieve greater insight

efficiency and innovation and Our data solutions empower
increase liquidity standardization clients’ growth, enabling
CLS is the world leader in Our processing solutions improved trading strategies,
FX settlement solutions. Our bring innovative standardization smarter business decisions
settlement services empower to post-trade processes, and better FX risk
client success by reducing risk, delivering the efficiencies management.
improving efficiency and clients need to compete
increasing liquidity. in the FX market.

Settlement
Reduce risk, improve efficiency

and increase liquidity

Settlement Processing Data
The CLSSettlement community

Oversight CLS service delivery
81shareholders Committee of 23 18 RTGS systems and development CLS vendors
central banks* partners
* The 23 central banks of the

CLS Oversight Committee comprise
18 of the currencies settled in CLS and,
in addition to the ECB, five of the
central banks in the Eurosystem.
** Excluding banks that only self-clear.

Also, one nostro can provide nostro service
for multiple currencies. There is no
requirement for nostros to be CLS
settlement members.

Membership growth
Full settlement membership
Affiliated settlement membership:

• Allows institutions to have more than one entity within their
corporate group become a settlement member
• Helps settlement members seeking to segregate their FX
businesses
• Removes the reliance on internal clearing and intergroup limits,
supports recovery and resolution planning efforts and assists in
responding to ring-fencing regulatory requirements
Non-shareholder settlement membership:

• Allows institutions to become a settlement member without
investing in shares of CLS Group Holdings
• Different commercial construct – a monthly minimum fee – in lieu
of shareholding and will therefore not receive shareholder rights

CLSClearedFX
• We are working with the global central counterparty (CCP) community
to develop a service to facilitate the settlement of cleared FX products
• The service provides payment-versus-payment settlement for cleared,
deliverable FX products in certain CLSSettlement-eligible currencies
• Supports goals set by the G20 to promote clearing of standardized derivatives,
expressed in PFMI
• Enables capital, margin, leverage, liquidity and operational
benefits for industry participants

CLSNow*
Bilateral, same-day, gross payment-versus-payment gross settlement
initially in 5 currencies and will:
• Mitigate settlement risk associated with other same-day trades
that are currently settled bilaterally outside of CLSSettlement
• Potentially expand the same-day market through the exchange
of liquidity across currencies with PvP settlement, which enables
better daily management of liquidity in a crisis/stress scenario
• Diminish member counterparty credit risk and associated
settlement limits, resulting in greater access to liquidity
• Mitigate the principal risk of out-legs of in/out swaps
* Launch of the product is subject to receipt of any necessary approvals

Cross currency swaps

Processing
Bringing together innovation

and standardization

CLSNet*
• Our bilateral payment netting solution, aimed at currencies settling
outside of CLS
• Designed to standardize and automate post-trade matching and
netting processes in these currencies
• Targeted at buy and sell side users, including banks, brokers, broker
dealers, asset managers, hedge funds and corporations, as well as
operations outsourcers
• Benefits:
• Operational risk mitigation
• System processing and operational efficiencies
• Liquidity enhancements
* Launch of the product is subject to receipt of any necessary approvals

Compression
Combines CLS’s central role in the

FX markets with NEX’s expertise in
multilateral exposure compression
and will deliver:
• Reduced operational risk
• Reduced counterparty exposure
and counterparty credit risk
• Reduced gross notional exposures
• Improved regulatory leverage ratio
• Improved capital usage

Data
Achieve greater insight

CLSTradeMonitor
• CLSTradeMonitor is a post-trade monitoring and reporting tool
that provides a consolidated view of all trade instructions submitted to
CLSSettlement and CLSNet
• Reliable mechanism to reduce operational risk.
• Targeted at operations that manage settlements across multiple CLS members
and accounts- focus on buy-side and corporate, but banks also interested
• Simple to use, customizable dashboard style interface and navigation menu
allows users to select trades of interest and drill down to individual instructions

CLSMarketData
Since its launch in 2002, CLS has warehoused the details of
every trade by instrument (swap, spot, outright forward) for the
18 currencies it settles across 33 major currency pairs creating
the largest single aggregated source of FX executed trade data
available to the market. The data reports provide an unparalleled
view of market activity to support best execution, risk mitigation
and reporting requirements.
• CLS Intraday FX spot volume: hourly executed FX spot trade volume

data to enhance trading models, support post-trade analysis and reporting,
and strengthen investment and research intelligence
• CLS FX Order Flow: daily aggregated FX spot order flow data showing
directional volume by counterparty type, market maker vs non-market
maker, and/or net directional volume for all parties
• CLS FX Pricing: daily/hourly aggregated spot prices with enhanced

Volume Weighted Average Price and Time Weighted Average Price
values to support best execution analysis

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Trusted market

CLS Classification: Public Information

Settlement Processing Data

Reduce risk, improve Bringing together Achieve greater insight

CLS Classification: Public Information

Reduce risk, improve efficiency

CLS Classification: Public Information

The CLSSettlement community

* The 23 central banks of the

** Excluding banks that only self-clear.

CLS Classification: Public Information

Affiliated settlement membership:

Non-shareholder settlement membership:

CLS Classification: Public Information

CLS Classification: Public Information

* Launch of the product is subject to receipt of any necessary approvals

CLS Classification: Public Information

CLS Classification: Public Information

Bringing together innovation

CLS Classification: Public Information

* Launch of the product is subject to receipt of any necessary approvals

CLS Classification: Public Information

Combines CLS’s central role in the

CLS Classification: Public Information

Achieve greater insight

CLS Classification: Public Information

CLS Classification: Public Information

• CLS Intraday FX spot volume: hourly executed FX spot trade volume

• CLS FX Pricing: daily/hourly aggregated spot prices with enhanced

CLS Classification: Public Information

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