CLS Group, a provider of risk mitigation and operational services for the global foreign exchange (FX) market, has completed the upgrade its settlement members to a new member gateway and market infrastructure (MI) channel.
CLS’s settlement members include 66 of the world’s largest financial institutions which are direct participants in CLS.
Over 21,000 third-party clients around the world also access CLS’s services indirectly through settlement members. These include banks, asset managers, hedge funds, non-bank financial institutions and multinational corporations.
CLS worked with each of its settlement members, as well as SWIFT, to build and integrate a new member gateway into each bank’s core architecture. The new gateway is based on the latest international technological innovations and market standards, including SWIFT ISO standards, and replaces the former proprietary gateway developed by CLS.
The new gateway enables settlement members to connect to CLS using ISO 20022 based XML messages and SWIFT infrastructure via a browser-based CLS Graphical User Interface (GUI), rather than through individual proprietary servers. CLS also worked with SWIFT to develop 13 new messages to support settlement processing of FX trades, providing settlement members with enhanced efficiency, improved security and process standardisation.
David Puth (pictured), CEO of CLS, says: “Maintaining a robust system is vital for us at CLS due to our critical role in mitigating settlement risk in the global FX market. As part of our ongoing program of system and technology upgrades to our services and infrastructure, we undertook a thorough review of the existing system. We then worked closely with our settlement members and technology partners to develop a new member gateway that would meet the demands of the global FX community today and in the future.”
John Hagon, head of operations of CLS, adds: “The new member gateway and market infrastructure channel is a scalable solution that offers greater flexibility and provides the performance and capacity required in a market environment driven by continuously evolving FX trading demands and growth. It will enhance connectivity with our clients while also delivering financial savings to them over the long-term.”
Denise Sommerville, managing director global operations, Morgan Stanley, says: “We recognise the scale of technological change and transformation of the underlying architecture embedded within the member gateway and applaud CLS’s success in introducing this cutting-edge technology into the post-trade settlement process. Using the latest international technical standards, including standardized access to SWIFT ISO 20022 messaging, will reduce complexity and, in addition, simplify access and communication paths with international counterparties.”