01.13.2021

Emerging Markets Regional Banks Join CLS

CLS, a market infrastructure delivering settlement, processing and data solutions, today announces that Alfa-Bank and First Abu Dhabi Bank (FAB) have agreed to initiate onboarding to CLSNet, a standardized, automated bilateral payment netting calculation service for over 120 currencies.

CLSNet standardizes and increases the levels of payment netting in the FX market. By settling the net amounts calculated by CLNet instead of gross amounts, clients benefit from improvements to intraday liquidity, greater operational efficiency and increased risk mitigation for non-CLS-settled currencies, many of which are in emerging markets.

Alfa-Bank, a leading Russian bank, and FAB, the UAE’s largest bank, will join the current CLSNet user community of global and regional banks, including Actinver, Bank of America, Bank of China (Hong Kong), BNP Paribas, Citibank, Goldman Sachs, Intesa Sanpaolo, J.P. Morgan and Morgan Stanley.

Further, Alfa-Bank and FAB are the first in their respective domiciles of Russia and the UAE joining CLSNet, demonstrating the service’s appeal to financial institutions trading non-CLS eligible currencies that want the benefits of bilateral netting calculations through an automated system from a trusted global provider. This highlights the growing reach of CLSNet to include a broader segment of the global FX market community.

Keith Tippell, Global Head of Product, CLS, commented: “The addition of these emerging market leaders demonstrates the appeal of CLSNet to FX market participants trading in emerging market currencies. Given the sharp focus on settlement risk mitigation across the industry, CLS is investing further in evolving CLSNet to ensure broad-based adoption and explore new functionality related to liquidity optimization and payment certainty.”

Andrew Chulack, Deputy Chairman of the Executive Board, Corporate and Investment Bank Director, Alfa-Bank, said: “We are honored to represent Russia in this global solution. As a leading Russian player in the global e-commerce and FX market and market maker for ruble instruments, CLSNet will allow Alfa-Bank to further develop its customer base and expand its business in the international market. Our participation in the service will be integral to our ability to improve operational efficiency and reduce risk for the currencies that we trade, particularly the Russian ruble, which is not currently eligible for settlement in CLS.

Anan Samaneh, SVP & Head of FXMM & Control Operations, FAB, said: “This agreement with CLS highlights FAB’s importance as a leader in the global FX market. Being the first mover in the Middle East showcases FAB’s commitment to embrace innovation, particularly as a specialist in emerging markets. We hope our vision to constantly grow stronger will spur other organizations in the region to similarly participate in this netting and confirmation system and improve standards across the board.”

Source: CLS

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