Foreign exchange settlement outfit CLS Bank is to establish a trade data repository for the global FX market, in a move designed to head off regulatory pressure for more transparency in the over-the-counter currency markets.
The provision of trade data repositories that can ensure transparency of trading, achieve timely matching and confirmation, and provide full information on the size and structure of the market in one venue is attracting heightened regulatory interest.
The need for such repositories is currently being prescribed for over-the-counter derivative markets, with pressure for similar initiatives expected to be applied to participants in the global foreign exchange industry.
CLS Bank currently settles nearly three quarters of available eligible market trades. It says the storage of all past, present and future dated FX trades already makes CLS the defacto industry repository.
CLS says it is working with member banks to further extend coverage and refine the reporting capabilities needed to satisfy any forthcoming regulatory requirements.
Jeff Feig, head of G-10 foreign exchange, Citi, comments: "The provision of trade data repositories is being developed across various OTC markets, but in the case of FX, we have CLS already in place to provide this service. It makes sense for CLS to offer to extend its data services in this way as they have extensive coverage of the market already."