CLS Group and Traiana, an ICAP company (IAP.L), announce that all eight founding member banks of the CLS Aggregation Service (CLSAS), a joint venture established to provide trade aggregation services to participants active in the over-the-counter FX market, have now gone live with the service.
The founding eight banks now using the service are: BofA Merrill Lynch (NYSE: BAC), Credit Suisse (NYSE:CS), Citigroup (NYSE:C), Deutsche Bank (XETRA: DBKGn.DE / NYSE: DB), Goldman Sachs (NYSE:GS), J.P. Morgan (NYSE:JPM), Morgan Stanley (NYSE:MS) and Royal Bank of Scotland (RBS.L).
Following the continued growth in FX volumes and the rapid expansion of the FX community, the service was developed as a solution to reduce operational risk, lower post trade costs and rationalise and consolidate legacy post-trade processes throughout the global FX markets.
The service went live in January 2010 and the founding banks have adopted the service over the course of the year. The service recently processed the highest daily volume recorded so far with over 164,110 gross trades aggregated down to 9,008 (a compression rate of nearly 95 per cent).
The aggregated trades are submitted for settlement in CLS thus providing dual benefits of alleviating the processing burdens on participating banks by over 90 per cent and settlement risk elimination. Volumes continue to increase as members bring more flows onto the service.
Alan Bozian, Chief Executive Officer of CLS Group and President and CEO of CLS Bank International said: "The FX market continues to thrive. Over the past three years, the industry has seen steady growth in volumes and in the number of market participants who are trading FX as an asset class. Growth in participation and advances in trading technology led to a re-appraisal of how to manage capacity.
CLS Aggregation fundamentally changes the post trade work flow to relieve capacity constraints downstream. The service has performed well and, as expected, has delivered increased compression ratios on peak volume days - a key benefit we predicted."
Gil Mandelzis, Traiana's Chief Executive Officer said: "The CLS Aggregation Service is a significant step forward in post-trade FX. We are grateful for the strong support from our founding banks and our foccus now will be to extend the number of clients using the service and open up greater trading opportunities for the FX industry."