Media contacts
Green Target
MUFG Bank goes live on CLSNet
Momentum continues to grow on platform delivering risk reduction and increased operational efficiency.
MUFG Bank (MUFG) has gone live on CLSNet, CLS’s bilateral payment netting calculation service for over 120 currencies. MUFG is the latest participant to go live on the service, which includes eight of the top ten global banks.1 The average daily netted value2 in CLSNet has consistently exceeded USD120 billion over the last 12 months, and in June 2024 reached USD593.2 billion netted, underscoring the growing network effect. As the CLSNet community continues to build, users of the service will increasingly benefit from the expanding roster of counterparties with whom they can fully automate the netting calculation process.
Designed to standardize and centralize post-trade processes for over 120 currencies across various FX trade types, including same-day trades and NDFs, CLSNet helps market participants to reduce risk and achieve greater operational efficiency for a broad range of currency flows. While settlement risk in the FX market continues to be an area of focus – especially in emerging market currencies and other growing segments of the market – market participants are looking for other ways to mitigate risk effectively.
Lisa Danino-Lewis, Chief Growth Officer, CLS, commented, “We are delighted to announce that MUFG has gone live on CLSNet. As our network expands, more and more participants around the world will experience significant improvements in operational efficiencies and risk mitigation.”
Junya Kishida, Head of Global Markets Operations Division, MUFG Bank, added: “Joining the service will improve our operational efficiency and reduce risk for the currencies that are not currently eligible for CLSSettlement, while supporting our adherence to the best practice settlement risk principles of the FX Global Code.”
CLSNet supports FX market participants’ adherence to the FX Global Code, particularly to Principles 35 and 50,3 as all trade instructions sent to CLSNet are validated and matched up to the pre-determined cut-off times between counterparties for each currency. This ensures that only matched trade instructions are included in the automated net calculation and that there is a single common record of the net payment obligations.
By automating the netting calculation process via a centralized platform, users benefit from greater operational efficiency and increased risk mitigation for currencies that are not currently eligible for CLSSettlement.
“Joining the service will improve our operational efficiency and reduce risk for the currencies that are not currently eligible for CLSSettlement.”
Head of Global Markets Operations Division
MUFG Bank
1 According to the 2022 Euromoney Foreign Exchange Survey.
2 Netted value refers to bilateral net payment amounts calculated by CLSNet.
3. Principle 35 provides that market participants should reduce their settlement risk as much as practicable and encourages the use of automated settlement netting systems. Principle 50 provides that market participants should properly measure, monitor and control their settlement risk and includes recommendations concerning the confirmation of bilateral net amounts and the agreement of predetermined cut-off points.