Omgeo to Reduce Risk and Cost in Foreign Exchange
Omgeo adds CLS FX instructions to Omgeo ALERT
New York/Boston – July 26, 2010 – Omgeo, the global standard for post-trade efficiency, announced today that it has added CLS FX instructions to Omgeo ALERT, to improve the way FX settlement instructions are published, stored and exchanged. Additional fields have been added to Omgeo ALERT, the industry’s largest and most compliant web-based Standard Settlement Instruction (“SSI”) database across multiple asset classes, to accommodate CLS Settlement Instructions.
This initiative, which was developed in direct response to client demand, will enable industry participants to, electronically and in real-time, publish and exchange accurate FX instructions settled in CLS. At present, most FX settlement information is communicated manually which leads to erroneous settlement instructions, one of the biggest causes of failed trades and a significant source of operational risk and cost. Now users will be able to store and access all of their FX settlement instructions in one place, eliminating the need to go to multiple sources.
Commenting on the Omgeo ALERT-CLS solution, John Burchenal, Managing Director, Market Growth, Omgeo said, “This joint effort pairs the two giants of the post-trade world – Omgeo, the largest community in the industry publishing SSI instructions across multiple asset classes, and CLS, the industry provider for FX settlement. It is our goal to significantly reduce operational risk and cost by enabling counterparties to safely and efficiently exchange the necessary validated information to facilitate CLS settlement.”
Adding to this, Jonathan Butterfield, Director, Communication, CLS Group said, “From an operational perspective, CLS participants will benefit from being able to add CLS instructions into their existing SSI database – Omgeo ALERT. They will no longer need to go to multiple places for settlement instructions for different asset classes or use different methods for accessing settlement instructions for FX. This brings the community one step closer to end-to-end FX processing and extends the high quality risk reduction delivered by CLS to a broader audience.”
Omgeo ALERT 2.5 with CLS functionality is now live, meaning that Omgeo ALERT now holds equity, fixed income, derivatives, non-CLS FX and CLS FX settlement instructions, making it the most comprehensive central settlement instruction database in the world.
About OmgeoSM
Omgeo creates certainty in post-trade operations through the automation and timely confirmation of the economic details of trades executed between investment managers and broker dealers. Every day Omgeo enables an efficient community of more than 6,000 financial services clients in 46 countries to manage matching and exception handling of trade allocations, confirmations, and settlement instructions. Omgeo has also extended its trade lifecycle coverage to include counterparty risk management, which supports end-to-end collateralization and reconciliation across multiple asset classes. Leading organizations rely on Omgeo to help manage an increasingly complex investment industry by providing operational stability and solutions that complement the focus on profitability in an era of escalating trade volumes. Across borders, asset classes, and trade lifecycles, Omgeo is the global standard for operational efficiency across the investment industry. Formed in 2001, Omgeo is jointly owned by the DTCC and Thomson Reuters.
About CLS
CLS Bank provides the largest multi-currency cash settlement system, eliminating settlement risk for over half the world’s foreign exchange payment instructions.
Owned by the foreign exchange community, CLS delivers greater operational efficiency when settling payment instructions related to trades executed in six traded financial instruments and in 17 major currencies (US Dollar, euro, UK Pound, Japanese Yen, Swiss Franc, Canadian Dollar, Australian Dollar, Swedish Krona, Danish Krone, Norwegian Krone, Singapore Dollar, Hong Kong Dollar, New Zealand Dollar, Korean Won, South African Rand, Israeli Shekel and Mexican Peso).
CLS Settlement is the only means by which settlement risk can be eliminated with finality using a unique combination of payment versus payment in central bank funds, multilateral payment netting and a standard legal framework, supported by a robust and resilient infrastructure.
In 2010 CLS is settling an average daily volume of 800,000 instructions with an average daily value of US$4 trillion. In June it settled a new record volume of 1,758,902 sides in one day. Continued growth in participation has resulted in the bank now settling in excess of 75% of the available eligible market trades. In 2009, participation in CLS increased by 70% and now comprises over 8,700 participants. CLS currently settles in 17 major currencies, which account for 95% of the daily value traded.
CLS Bank is based in New York and is an Edge Corporation bank supervised by the Federal Reserve.
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