Société Générale has officially gone live on CLS’s cross-currency swaps (CCS) service, joining a growing list of participants leveraging the solution to mitigate settlement risk and enhance liquidity efficiency.
Cross-currency swap transactions pose significant settlement risks due to the high value of initial and final principal exchanges. These trades, when settled on a gross bilateral basis, often result in operational inefficiencies and strain on liquidity. CLS’s CCS service integrates with post-trade processing platform MarkitWire, enabling participants to seamlessly incorporate cross-currency swap flows into CLSSettlement. This integration provides multilateral netting benefits across all FX transactions, significantly reducing daily funding requirements and optimizing liquidity.
Pierre-Jean Benazech, Global Head of Cross-Currency Swaps Trading at Société Générale, expressed enthusiasm for the adoption of CLS’s CCS service:
“We look forward to leveraging CLS’s CCS service to optimize liquidity and mitigate settlement risk. The unique PvP settlement system and netting capabilities mark a positive step forward in our efforts to enhance our foreign exchange operations.”
The service has experienced exponential growth, with the value of CCS trades submitted to CLSSettlement increasing by 87% year-over-year in Q3 2024. This momentum reflects the growing adoption of CLS’s solutions as financial institutions seek to minimize settlement risks and improve operational efficiency.
Lisa Danino-Lewis, Chief Growth Officer at CLS, added:
“We are delighted that Société Générale has gone live on our CCS service. This participation underscores the service’s value in enhancing operational and liquidity efficiencies for CCS trades. The strong growth we’ve observed demonstrates a clear commitment by FX market participants to adopt innovative solutions that reduce settlement and systemic risks.”
Additionally, CLS emphasized that its growing CCS adoption supports regulatory and policy initiatives promoting payment-versus-payment (PvP) mechanisms, aligning with broader industry efforts to mitigate risks in the over-the-counter (OTC) derivatives market.
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