Icap and CLS set up FX post-trade joint venture

Icap and CLS set up FX post-trade joint venture

Interdealer broker Icap and FX risk reduction network CLS are to create a new joint venture company offering post-trade aggregation services to participants in the over-the-counter currency markets.

The joint venture company will look to address pre-settlement risks in foreign exchange trading as volumes rise on the back of an influx of new business from hedge funds, algorithmic traders, retail and institutional market participants. It will be 51%-owned by CLS Group and 49% by Icap, and has attracted the support of leading prime brokers, including Citigroup, Deutsche Bank, JPMorgan and Royal Bank of Scotland.

Mark Yallop, chief operating officer, Icap, says: "By bringing together the leading players in the industry and a sound technology platform, we can reduce risk and increase industry capacity to create the opportunity for very material further growth in the market."

Technology for the venture will be provided by Icap subsidiary Traiana, through its post-trade processing Harmony Network. The trade aggregation service is expected to be ready by mid-year, subject to regulatory approval.

Other significant FX prime broking banks will be invited to become part of the founding group, says Yallop.

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