Tech Answers The Call To Tackle FX’s Best Execution Dilemma

Over one-third of traders cite ‘best execution’ as their greatest daily trading issue according to a recent report by JP Morgan. The FX industry is looking to all aspects from, exchanges, market infrastructure providers and algorithmic trading to aid them in solving this problem.

The report entitled ‘e-trading trends for 2018 surveyed over 400 institutional traders to gain insight into what they think the main issues and trends will be in the year ahead.

ParFX

ParFX, a spot FX platform has measures in place to improve execution quality such as its unique randomized pause and enhanced trade cycle transparency. The company’s CEO Dan Marcus explained on Bloomberg TV that, “As a venue, what we’ve always tried to deliver is best execution, what you now see is there is more transparency, more surveillance, more systems, more controls, to sure we deliver the best execution that the regulators can see is traded in the market.” ParFX’s measures were put in place to remove the negative impact some high-frequency traders were having on the FX markets. By reducing this negative impact, ParFX has provided traders a fast, reliable and ultimately accurate platform where orders can be carried out efficiently.

Pragma

Traders are also looking to algorithmic trading to improve the quality of their execution. Curtis Pfeiffer, Chief Business Officer at Pragma Securities, believes the rise of algorithmic trading, which now accounts for more than one-third of flows in institutional currency markets, is due to how market prices and execution prices are databased. A database makes it simpler for their clients to carry out analysis of their execution quality and therefore improve their future decision making.

CLS

CLS is also providing tools to aide traders achieve their best execution goals, with the timely release of CLS’s FX Forecast data. This new tool provides subscribers with a forward-looking view of FX markets on an hourly basis, enabling them to quickly detect potential price movements and identify times to trade with greater liquidity, reducing market impact and signaling risk.

Alan Marquard, Chief Strategy and Development Officer at CLS, said: “Our position at the center of the global foreign exchange market means we are ideally placed to provide comprehensive and accurate data insights to market participants. Incorporating our forecast data into trading strategies can provide institutions with a better view of trading capacity, enabling them to optimize and time their trades. It also helps risk teams to more accurately adjust their models to the changing market. Ultimately, this will lead to a safer and more profitable foreign exchange market.”

Where Next? 

In a financial landscape where liquidity seems abundant, new innovative technologies are aiding traders to maximize best execution, however, it remains to be seen whether this will address what is now the biggest concern facing traders today.

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Foreign exchange in 2018: David Puth speaks to FX Week

Technology and regulatory guidance and principles will shape the foreign exchange (FX) market’s structure in 2018, according to David Puth, CEO of CLS, in an exclusive interview with FX Week.

2017 saw the publication of the FX Global Code, and a number of leading financial services and technology institutions confirmed their commitment to adopting and instilling its principles. This trend, Puth says, will continue in 2018 as the Global Foreign Exchange Committee publishes its final guidance on Principal 17 covering “last look”.

2018 will also be a year in which CLS expands its role offering new solutions to improve efficiency and reduce risk in the FX market.

“We are becoming more than a settlement utility. While delivering the risk mitigation that comes with safe settlement is our primary mission, we continue to focus on delivering products that solve client problems,” says Puth.

These include a same-day settlement service for five of the world’s most liquid currencies, and its much-anticipated distributed ledger technology (DLT) enabled netting service, CLSNet.

These technologies will likely have a significant impact on FX market structure, helping it to become more efficient and speed up the movement of currency around the world.

For more on what 2018 holds for FX, including David’s thoughts on the dollar and bitcoin, read the full interview here.

FX trading volumes rebound from summer lull

CLS’s currency trading volumes saw a significant uptick, as volatility in the foreign exchange (FX) market bounced back in September.

Following a bumpy period in geopolitics over the summer, trading activity rose strongly to almost USD 1.750 trillion in last month, according to the largest provider of settlement services in the global foreign exchange market.

Data from CLS showed a 10.7 percent month-on-month increase in the number of trade instructions submitted in September from USD1.581 trillion in July 2017.  This also represents a very significant 15.9% increase from this time last year, when volumes totalled USD1,514 trillion.

CLS’s figures reflect the trend observed in the monthly figures from many of the major trading platforms. However, given its position as a central settlement hub for the wholesale market, CLS provides the most comprehensive snapshot of activity, encompassing data from 18 global currencies and approximately 21,000 trading entities around the world.

 

 

 

 

 

 

Chatsworth supports global push to restore trust to the world’s largest financial market

 

Foreign Exchange is the world’s largest and most liquid market and it has taken a repetitional battering over recent years.

Now the final part of the Bank of International Settlements’ (BIS) FX Global Code has been published, following a two-year, industry-wide effort to rebuild trust in the FX market following a series of scandals and market challenges over the past decade.

The Code sets out a comprehensive set of best practice guidelines which outline how all market participants should behave to uphold the highest standards of transparency and ethics in the wholesale FX market.

Chatsworth is proud to have played our part through our work with CLS and its CEO David Puth – Chairman of the BIS’s Market Participants Group and one of the principal authors of the code. This included an extensive engagement campaign to educate the press and FX market on the Code’s aims and objectives.

More than 1,500 people have had input to the Code and have helped to shape a set of high-level principles that will impact their day-to-day business practices.

The final document has received widespread support across the FX industry. A number of industry participants – banks, platform providers, technology vendors and trade associations – have backed it.

Now it is the time for the FX industry to adopt the Code’s principles and all FX professionals to read, understand and apply it to their everyday trading and transactional activity.

David Puth speaks to Bloomberg TV about the Code

 

In search of FX liquidity

Foreign exchange (FX) is one of the world’s most liquid markets, with around USD 5 trillion exchanged across borders every day.

However, there is a perception in the market that liquidity is on the wane.

This is not necessarily true, according to David Puth, CEO of CLS. Speaking to Euromoney, he said “There is a tendency for market participants to believe that liquidity was better in the past. From what we see at CLS, liquidity appears to be very strong. It is, however, different, with liquidity widely dispersed over a number of different trading venues.”

The pessimism may in part be as a result of the increasing difficulty in defining exactly what liquidity means in the modern market, and measuring it accurately.

This was one of the questions which a recent report on liquidity in the Americas from the Bank of International Settlements (BIS) attempted to address.

Traditional liquidity metrics, such as cost metrics, quantity metrics and trade impact, have their uses, but the report finds that none are a perfect way to measure liquidity in the modern market.

This is important because one thing which is clear is that the modern FX market is becoming increasingly complex, making understanding liquidity more difficult.

The market, like many others, is fragmenting as electrification proliferates the number of trading venues and sell side participants put more emphasis on internalising trades.

Whether this fragmentation is having an impact on traders ability to trade, remains an open question.

The BIS report indicates that fragmentation does appear to be having some impact on liquidity measures, particularly when it comes to periods of market stress.

It gives examples such as the 2016 British EU referendum and flash crashes, where traditional liquidity metrics appear to have been impacted across a number of currency pairs, at least over the short term.

Dan Marcus, CEO of ParFX, points out that sometimes individual metrics don’t always give the full picture. “It may be the case that volumes are down from where they were… [However] on ParFX we do not see evidence of a problem with market depth or the ability for traders, who need to trade, fill orders.”

This is in part because, while technology is driving fragmentation, it is also creating opportunities to aggregate liquidity in more efficient ways.

“Buy-side traders have responded [to FX market fragmentation] by turning to algorithms and taking on more execution risk themselves”, says Pragma’s CEO David Mechner.

Liquidity is the lifeblood of the FX market, it is vital that the market can measure it in a way which gives an accurate representation of what it is like to trade. One solution, suggested by Mechner, is a consolidated tape, much like in equities. Until then, the market should think carefully about the metrics used to measure the market and ensure they are fit for purpose.

Post-result: input volumes submitted to CLS

Input volumes1 submitted to CLS

CLS witnessed increased levels of FX trading activity during the announcement of US election results, with particular spikes in activity between 02:00 – 03:00 GMT when the results for key swing states were announced (input volumes were 7 times normal levels for that hour). This heightened activity continued following the confirmation of Republican candidate Donald Trump as president between 08:00 – 09:00 GMT, when input volumes were more than double normal levels for that hour. 

Significant spikes were registered across currency pairs between 02:00 and 03:00 GMT, with input volumes ten times normal levels for EUR/USD for that hour, followed by USD/JPY and GBP/USD (nine times and five times respectively).

The largest increase in currency pair activity was the US dollar traded against the Mexican peso (USD/MXN), 63 times normal levels for that hour.

A full breakdown can be found below.

Between 02:00-03:00 (GMT), CLS total input volumes increased significantly to 199,030 compared to a YTD average for that hour of 28,829 i.e. volumes were 6.9 times normal levels.

For the same period, the input volumes for the top five most traded currency pairs and the USD/MXN were as follows:

Currency pair

input volume for 02:00-03:00 (GMT)

YTD average input for 02:00-03:00 (GMT)

input as multiple of average

EUR/USD

33,675

3,226

10.4

USD/JPY

75,575

8,598

8.8

GBP/USD

6,732

1,436

4.7

AUD/USD

18,220

4,461

4.1

USD/CAD

8,177

1,049

7.8

USD/MXN

8,803

139

63.3

Between 08:00-09:00 (GMT), CLS total input volumes increased significantly to 150,487 compared to a YTD average for that hour of 66,983 i.e. volumes were 2.2 times normal levels.

For the same period, the input volumes for the top five most traded currency pairs and the USD/MXN were as follows:

 Currency pair

input volume for 08:00-09:00 (GMT)

YTD average input volume for 08:00-09:00 (GMT)

input as multiple of average

EUR/USD

36,867

14,985

2.5

USD/JPY

38,946

10,991

3.5

GBP/USD

8,797

6,233

1.4

AUD/USD

11,347

6,024

1.9

USD/CAD

6,578

3,054

2.2

USD/MXN

4,458

651

6.8

 

1 Input volumes are the number of instructions received by CLS for future settlement combining the settlement and aggregation services. 

CLS Data: CLS makes aggregated FX trade data available to subscribers through Quandl, a data platform for economic and financial data. Data is available for subscription in the form of three separate reports, showing activity by hour, day or month. The data reports contain trade volume in terms of both the number of trades and the total value in USD. The data is aggregated by trade instrument (spot, swap and outright forward) and currency pair. Visit the Quandl website to find out more.

 

 

Currency trading volumes bounce back in September

After August’s annual slowdown, currency trading activity bounced back to almost USD5 trillion in September.

Currency trading activity rose strongly in September, according to the largest provider of settlement services in the global foreign exchange market.

Data from CLS showed a 17.5% month-on-month increase in the number of trade instructions submitted in September, reaching 1,038,025. The value of these trades equated to just shy of USD5 trillion, an increase of 6.6%.

September’s data indicated it was also the second busiest month for CLS in 2016, second only to June’s peak of USD5.19 trillion. The data also showed a 3.7% increase from September 2015, when trading activity totaled USD4.81 trillion.

While the increase mirrors a similar trend observed across many of the major trading platforms last month, CLS’s data provides the most accurate and comprehensive snapshot of activity in a given month – encompassing data from 18 global currencies and approximately 21,000 trading entities around the world.

screen-shot-2016-10-14-at-13-02-09

Standardised netting of FX payments moves closer to reality

In a guest post for Fintech Focus, David Puth, CEO of CLS, explains how standardised netting of payments can deliver greater efficiencies for the foreign exchange market.

Leaders from the financial services and technology industries are descending on the Sibos conference in Geneva this week. This annual gathering of the buy-side and sell-side, fintechs and transaction banking specialists showcases the very best in technology, innovation and ideas that ensure financial technology continues to shape the way business, finance and commerce operates.

While some areas of financial markets and technology have undergone significant development over a number of years, there is clearly an opportunity for post-trade partners to do more – including in foreign exchange (FX). CLS sits at the heart of this market and sees approximately USD5 trillion of payment instructions settle through our core service every day.

In the search for ever more ways to improve liquidity and efficiency, we are focused on innovation centering on the payment efficiency of our clients’ underlying supporting infrastructure. For traders in a market of such size and scale, efficient netting of payments can have a significant impact on intra-day liquidity demands and an institution’s overall ability to effectively manage risk.

The inception of CLS in 2002 addressed many of these issues for institutions that use our services. Our role is to protect our settlement members, 66 of the world’s leading financial institutions, and 21,000 of their clients, from the most significant risk in the FX market – settlement risk.

Time for innovation

However, not all currencies or market participants access our core settlement service. And while some participants are currently capable of bilateral payment netting for trades not settled in CLS, this practice is not universally adopted. Various bespoke approaches to payment netting lack standardisation, scalability, and efficiency, which in turn increase operational risk. Therefore, many institutions limit their payment netting activities to their larger counterparties.

In addition, many FX market participants across the buy-side and sell-side do not use bilateral payment netting and instead settle a significant portion of their non-CLS trades on a gross basis. Gross settlement without netting requires access to deep liquidity, which requires institutions to allocate more collateral and capital.

To address this gap in the market, we are working closely with the global FX market community to develop CLS Netting, a standardised, bilateral payment netting solution for all market participants, regardless of whether or not they currently have access to CLS.

Netting already forms a crucial part of our settlement offering and the facilitation of standardised netting for a wider group of institutions will significantly improve the way currency payments are netted across the globe, with tangible benefits for clients.

Participants will be able to submit FX instructions for six products and 24 currencies. In addition to the 18 currencies CLS currently settles, we will offer payment netting for the Chinese renminbi (offshore), Czech koruna, Polish zloty, Russian rubble, Thai baht and Turkish lira.

CLS Netting will standardise bilateral matching and payment netting in these currencies, manage payment netting positions through a single interface and enable automated reconciliation. This will decrease the volume of payments manually initiated, resulting in fewer late or failed payments.*

The strong appetite for a globally standardised netting service is demonstrated by the desire of leading international financial institutions to become early adopters. So far, 14 have committed to work with CLS, including: Banco Actinver, Bank of America, Bank of China – Hong Kong, Bank of Tokyo-Mitsubishi UFJ, Citibank, FirstRand, Goldman Sachs, Goldman Sachs Asset Management, HSBC, Intesa Sanpaolo, JPMorgan Chase, Morgan Stanley, Neuberger Berman, Northern Trust – with others joining this group in due course.

Use of distributed ledger technology

The speed at which technological innovations are developing leads us to focus our efforts on those post-trade processes where change is possible. Our goal is to continue to expand and develop the service with new currencies, products, and technologies, and the adoption of distributed ledger technology (DLT) will be central to this.

In addition to submitting FX instructions over existing SWIFT-based channels, participants will have the option of connecting directly to CLS Netting via a highly secure, permissioned distributed ledger, administered by CLS.

As a founding member of the Linux Foundation’s Hyperledger Project, we have long acknowledged the benefits of distributed ledger technology and have worked diligently over the past 12 months to explore how DLT can be used to improve efficiencies, security, and resilience in the global FX community.

It is crucial that the basic fabric of any distributed ledger technology we use for the CLS Netting platform adheres to high standards and resilience. We will incorporate DLT capabilities in a way that is meaningful to our members and participants, and we believe it has enormous potential.

To facilitate broad adoption amongst industry participants, we will collaborate with IBM to develop the underlying technology, which will be based on the Hyperledger fabric rather than a proprietary solution. IBM is a key member of the Hyperledger Project and has been a partner of CLS since our inception. Our partnership creates the foundation for new technology that can be applied not only to CLS, but more broadly across the financial industry.

 

Japan’s Daiwa Securities Group joins CLS

Daiwa joins 65 other financial institutions in becoming a direct participant in CLS’s settlement and risk mitigation system.

The Japanese financial institution is one of the largest securities companies in Japan and has a significant global presence. It joins 65 other financial institutions in becoming a direct participant in CLS’s settlement and risk mitigation system – which settles approximately USD5 trillion a day on behalf of its clients.

The Japanese currency market is the largest international hub for currency trading in Asia. Recent data from the Tokyo FX Market Committee’s semi-annual FX turnover survey found that a daily average of USD407 billion was traded in April 2016 – an increase of 5% from October 2015.

Furthermore, one of the effects of Abenomics – a collection of policies designed to reinvigorate the Japanese economy – has been greater international diversification of Japan’s financial assets. As cross-border currency trade increases, the emphasis on reducing counterparty risk is becoming even more crucial.

As a CLS settlement member, Daiwa Securities Group and its clients across the globe will benefit from significant liquidity, operational and IT efficiencies to support their currency trading operations.

CLS’s aggregated FX trade data now available

CLS announced it has begun making its FX trade and volume data available via Quandl, an economic and financial data platform.

Subscribers to Quandl will now have access to CLS’s data, which will be delivered on an hourly, daily or monthly basis and aggregated by trade instrument (spot, swap and outright forward) and currency pair.

The currency settlement system, which settles 18 of the world’s most actively-traded currencies, receives an average submission of almost USD 5 trillion every day from banks, asset managers, corporations and hedge funds.

According to David Puth, CEO of CLS, this is the first time CLS has made this level of aggregate data readily available to the market. “It is a key source of trade information that will allow a broad range of users to get a clear picture of FX market activity across major currency pairs and products,” he says.

This view was backed up by Quandl’s co-founder and chief data officer Abraham Thomas, who spoke to trade publication Inside Market Data: “CLS had been aware for some time that it was sitting on a valuable data asset, but didn’t have the distribution infrastructure… or background in monetizing data. They reached out to us a few months ago when they became aware of our data marketplace… especially because our audience includes a bunch of hedge funds and asset managers.”

CLS has historically made aggregated and anonymized data available to the market, but the data made available through Quandl is available in a format more conducive to analysis and with greater frequency.

Customers interested in the data is expected to include large financial institutions, small financial services companies, software companies, academic institutions and research organizations.

Read the news story here.

Foreign Exchange Trading Volumes Surge Following Brexit Vote

The release of settlement data from CLS, the post-trade settlement service for the global foreign exchange (FX) market, marked a significant increase in trading activity in June. As markets reacted to considerable volatility in GBP and other major currencies following the Brexit vote, trading volumes spiked as banks and funds looked to reposition portfolios and offset risk.

As a result, daily average value submitted to the CLS settlement system hit USD 5.19 trillion, up 12.6% from the previous month and the highest since March 2015. Average daily volumes were also up, increasing by 20% compared to May 2016.

This was a trend observed across the FX market, with foreign exchange trading venue EBS reporting comparatively higher FX trading volumes for June at USD 97.4 billion, a rise of 28.7% from May 2016. ReutersFXAll also matched this trend, recording Spot FX volumes of USD 116 billion, up from USD 94 billion in May.

The Currency Ethicist: One Man’s Push to Fix a Tarnished Market

Last week, the Bank for International Settlements launched a code of conduct for market professionals operating in the world’s largest and most liquid financial market – foreign exchange – and in doing so, laid out its vision of how banks, asset managers, hedge funds, corporates and infrastructure providers should behave and operate when exchanging an estimated USD5.3 trillion a day.

At the heart of this initiative was David Puth, Chairman of the BIS Market Participants Group. A former JPMorgan Chase & Co. and State Street Corp. executive, David led the initiative alongside his role as chief executive officer of New York-based CLS Group, a utility that settles trillions of dollars of currency transactions a day and is considered by the U.S. Treasury to be a systemically important piece of the financial system.

He spoke to to Bloomberg about the importance of developing industry-led guidance around trading behaviour and best practice requirement, and how the code of conduct aims to provide a common set of guidelines to promote the integrity and effective functioning of the market.

Read the article, or watch the Bloomberg interview

Daily traded currency values from banks and funds around the globe hit USD 4.96 trillion in April

A surprise from the global currency markets which have been in something of a state of flux of late.

Daily average value submitted to the CLS global settlement system hit USD 4.96 trillion in April, up 5.7% from the previous month, and up 6.9% from the USD 4.64 trillion in April 2015.

Volumes have been below USD 5 trillion a day for most of 2016 so far but the new CLS figures show that April was the busiest month this year.

And this April matters a great deal because the month’s trading activity feeds into Bank of International Settlement’s triennial survey of the foreign exchange market released in September.

The survey is the most holistic picture of global FX market activity, showing detailed activity broken down by trading centres, counterparty types and currency pairs.

The global currency markets remains in a state of flux. Diverging monetary policy, changes in liquidity provision, venue usage and the profile and diversity of trading counterparties are all factors changing the shape of the market.

Take trading venues. Despite the uptick in month on month CLS settlement activity in April, trading volumes actually fell on some of the major trading platforms.

EBS reported USD 82.3 billion last month, which was actually a drop of 15% on the USD 96.9 billion last year recorded in April 2015. It was a similar picture over at Thomson Reuters.

Global FX bounces back to over USD 5 trillion in February

February was a tumultuous time for financial markets, with high volatility influenced by the threat of a potential Brexit and ongoing turmoil in the Chinese economy. 

CLS, the global FX settlement utility has released its settlement data for February showing average daily input value was USD 5 trillion up 3.3% from USD 4.84 trillion in January 2016.

Some FX platforms reported a month-on-month decline in daily spot trading volumes. 

Average daily volumes at EBS were USD 102.6 billion in February 2016, down 1% from the January 2016 reading of USD 103.8 billion.

Read the full report in Reuters

Preparing the FX market for a Grexit

As a systemically important financial utility created to mitigate settlement risk – the most significant risk in the wholesale foreign exchange market – it is important that CLS is prepared for any market event, no matter how extreme.

In June we worked alongside CLS to provide journalists covering the potential ‘Grexit’ with an insider’s view on how a systemically important financial market utility ensures its readiness for all eventualities – even a possible return to the drachma.

To read more, head over to Bloomberg, where John Detrixhe spoke with CLS’s head of global regulatory affairs, Dino Kos.

CLS reports daily settlement record with FX transactions worth over USD 10 trillion

 

 

·        For the first time in its history, CLS settled over two million FX instructions
·        The record of precisely 2,000,206 instructions was set on Wednesday 17 September, exactly a week after the company’s thirteenth anniversary since its inception, surpassing the previous record of 1,993,544 instructions on 18 September 2013

 

 

·        Around 99% of the instructions were settled in just 45 minutes, between 07:15 and 08:00, a testament to the company’s recent technology upgrades

 

 

·        Values were also exceptionally high at USD10.08 trillion, not far below the current record, which remains at USD10.34 trillion, recorded on 19 March 2008

 

 

CLS Settlement Service and Aggregation Service Data: Monthly Volumes and Values, August 2014

 

Total Input Volumes1 and Values

 

In August 2014:

 

The average daily volume submitted to CLS, combining the settlement and aggregation services, was 1,035,978 up 11.9% from 926,174 in July.

 

 

The average daily value submitted to CLS was US$4.90 trillion up 4.0% from US$4.71 trillion in July.

 

Screen Shot 2014-09-08 at 14.40.04

 

1 Input volumes are the number of instructions received by CLS on a given day for future settlement. Input instructions are not necessarily settled during the month in which they were submitted.

 

Note: CLS reports both sides of an FX transaction. To adjust the average daily value data to equate to the same reporting convention used by the Bank for International Settlements and the semi-annual foreign exchange committee market reports, the gross values should be divided by two.

 

In January 2013, CLS recalculated its monthly data, resulting in non-material changes to volume figures by an average of 0.5%. The data above reflects this calculation.

 

 

CLS Settlement Service and Aggregation Service Data: Monthly Volumes and Values, July 2014

CLS Settlement Service and Aggregation Service Data:

Monthly Volumes and Values, July 2014

 

Alexander Filshie, Chief Financial Officer, CLS:  “The average daily volume submitted to CLS in July 2014, combining the settlement and aggregation services, was 926,174 down 9.8% from 1,027,055 in June. The average daily value submitted to CLS was US$4.71 trillion down 13.7% from US$5.46 trillion in June.”

 

Screen Shot 2014-08-07 at 14.47.42

 

Input volumes are the number of instructions received by CLS on a given day for future settlement. Input instructions are not necessarily settled during the month in which they were submitted.

 

Note: CLS reports both sides of an FX transaction. To adjust the average daily value data to equate to the same reporting convention used by the Bank for International Settlements and the semi-annual foreign exchange committee market reports, the gross values should be divided by two.

 

In January 2013, CLS recalculated its monthly data, resulting in non-material changes to volume figures by an average of 0.5%. The data above reflects this calculation.

 

CLS Settlement Services and Aggregation Service Data: Monthly Volumes and Values, June 2014

CLS Settlement Service and Aggregation Service Data:

Monthly Volumes and Values, June 2014

 

Total Input Volumes1 and Values

 

In June 2014:

  • The average daily volume submitted to CLS, combining the settlement and aggregation services, was 1,027,055 up 5.1% from 977,460 in May

 

  • The average daily value submitted to CLS was US$5.46 trillion up 13.3% from US$4.82 trillion in May

 

clsjunevols

 

 

1 Input volumes are the number of instructions received by CLS on a given day for future settlement. Input instructions are not necessarily settled during the month in which they were submitted.

 

 

Note: CLS reports both sides of an FX transaction. To adjust the average daily value data to equate to the same reporting convention used by the Bank for International Settlements and the semi-annual foreign exchange committee market reports, the gross values should be divided by two.

 

 

In January 2013, CLS recalculated its monthly data, resulting in non-material changes to volume figures by an average of 0.5%. The data above reflects this calculation.

 

 

CLS wins landmark Supreme Court case

We are pleased to announce that the US Supreme Court today unanimously agreed with CLS Bank that the abstract idea of intermediated settlement is not patent-eligible under Section 101 of the Patent Act.

 

This decision caps extended litigation in which all three levels of the federal court system – the district court, the court of appeals, and now the Supreme Court – have confirmed the correctness of CLS Bank’s position.

 

David Puth (CEO, CLS Bank): “Throughout this case we have sought to highlight why the claims against CLS directly threatened an entity that is vital to the functioning of the largest and most liquid market in the world, foreign exchange. CLS ensures trillions of dollars reach their intended counterparties every day with certainty and security and has set the standard for international communication and cooperation. CLS can now continue its mission to enhance financial stability by providing risk mitigation services to the global foreign exchange market.”

 

David Puth 2

 

 

Alan Marquard (Chief Legal Officer, CLS Bank): “In our view, the Supreme Court correctly decided this case, and we are very pleased with the decision.  Alice’s attempt to patent the abstract idea of financial intermediation was rightfully rejected by the Supreme Court. Financial intermediation is critical to the safe and effective operation of all global markets, and we are proud to have led the fight against a very real risk to the economy and the financial ecosystem.”

 

Mark Perry (lead counsel for CLS Bank): “The Supreme Court correctly rejected the attempt of Alice Corporation, a non-practicing entity or “troll,” to foreclose productive companies like banks from practicing the ancient economic method of intermediated settlement.  As the Court explained, patent law does not allow someone to monopolize a fundamental abstract idea, and implementing the idea on any generic computer does not change this result.  We are delighted with the result.”

 

About CLS

 

“(CLS) may be the most important bit of the financial infrastructure you have never heard of.”  Special FX, THE ECONOMIST, Sept. 21, 2013, 69.

 

CLS significantly mitigates settlement risk by standing between parties to a foreign exchange transaction and ensures that trillions of dollars reach their intended destination around the globe.

CLS Bank’s importance to the financial system is now well-established.  More than half of all currency exchanges for 17 of the world’s most actively traded currencies are executed using CLS Bank.

 

Following the collapse of Lehman Brothers in September 2008, for example, CLS ensured that the foreign exchange market continued to function without disruption—just months after it had settled a record USD 10.3 trillion of transactions in one day.

 

CLS was one of the eight entities designed by the US Fed as a “systemically important” financial market utility to the global financial system.

 

For more information:

 

contact@chatsworthcommunications.com

 

 

 

CLS Settlement Services and Aggregation Service Data: Monthly Volumes and Values, May 2014

CLS Settlement Service and Aggregation Service Data:

Monthly Volumes and Values, May 2014

 

Total Input Volumes1 and Values

 

In May 2014:

 

  • The average daily volume submitted to CLS, combining the settlement and aggregation services, was 977,460 down 0.7% from 983,850 in April

 

  • The average daily value submitted to CLS was US$4.82 trillion up 0.6% from US$4.79 trillion in April

 

PDF May figures

1 Input volumes are the number of instructions received by CLS on a given day for future settlement. Input instructions are not necessarily settled during the month in which they were submitted.

 

Note: CLS reports both sides of an FX transaction. To adjust the average daily value data to equate to the same reporting convention used by the Bank for International Settlements and the semi-annual foreign exchange committee market reports, the gross values should be divided by two.

 

In January 2013, CLS recalculated its monthly data, resulting in non-material changes to volume figures by an average of 0.5%. The data above reflects this calculation.

 

 

 

CLS Settlement Service and Aggregation Service Data: Monthly Volumes and Values, April 2014

CLS Settlement Service and Aggregation Service Data:

Monthly Volumes and Values, April 2014

 

Total Input Volumes1 and Values

 

In April 2014:

 

  • The average daily volume submitted to CLS, combining the settlement and aggregation services, was 983,850 down 14.9% from 1,155,507 in March
  • The average daily value submitted to CLS was US$4.79 trillion down 10.5% from US$5.35 trillion

 

CLS April 2014

 

 

1 Input volumes are the number of instructions received by CLS on a given day for future settlement. Input instructions are not necessarily settled during the month in which they were submitted.

 

Note: CLS reports both sides of an FX transaction. To adjust the average daily value data to equate to the same reporting convention used by the Bank for International Settlements and the semi-annual foreign exchange committee market reports, the gross values should be divided by two.

 

In January 2013, CLS recalculated its monthly data, resulting in non-material changes to volume figures by an average of 0.5%. The data above reflects this calculation.

 

 

CLS Settlement Service and Aggregation Service Data: Monthly Volumes and Values, March 2014

CLS Settlement Service and Aggregation Service Data:

Monthly Volumes and Values, March 2014

 

Total Input Volumes1 and Values

In March 2014:

  • The average daily volume submitted to CLS, combining the settlement and aggregation services, was 1,155,507, up 0.4 % from 1,150,663 in February
  • The average daily value submitted to CLS was US$5.35 trillion, up 3.9% from US$5.15 trillion

 

 

CLS March 2014

 

1 Input volumes are the number of instructions received by CLS on a given day for future settlement. Input instructions are not necessarily settled during the month in which they were submitted.

 

Note: CLS reports both sides of an FX transaction. To adjust the average daily value data to equate to the same reporting convention used by the Bank for International Settlements and the semi-annual foreign exchange committee market reports, the gross values should be divided by two.

 

In January 2013, CLS recalculated its monthly data, resulting in non-material changes to volume figures by an average of 0.5%. The data above reflects this calculation.

 

 

Showdown at the Supreme Court

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IT MAY be humdrum, but it is a vital component of the financial system. CLS, established in 2002, operates a key part of the plumbing of the foreign-exchange market: its computer systems ensure that none of the trillions of dollars traded every day get lost… Click here for more.

 

Stalking Trolls

 

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As the US Supreme Court meets to decide in the Alice v CLS Bank case, read The Economist’s take on why vague and overly broad patents are stymying innovation.  Frivolous lawsuits filed by trolls cost American companies $29 billion in 2011 alone.

 

AT LAST, it seems, something is to be done about the dysfunctional way America’s patent system operates. Two recent developments suggest calls for patent reform are finally being heard at the highest levels, Click here for more…

 

 

 

 

CLS monthly settlement figures, February 2014

 

 

Total Input Volumes and Values

 

In February 2014:

 

  •  The average daily volume submitted to CLS, combining the settlement and aggregation services, was 1,150,663, down 5% from 1,210,588 in January
  •  The average daily value submitted to CLS was US$5.15 trillion, down 2.7% from US$5.29 trillion

Screen Shot 2014-03-13 at 14.38.23

 

Input volumes are the number of instructions received by CLS on a given day for future settlement. Input instructions are not necessarily settled during the month in which they were submitted.

 

Note: CLS reports both sides of an FX transaction. To adjust the average daily value data to equate to the same reporting convention used by the Bank for International Settlements and the semi-annual foreign exchange committee market reports, the gross values should be divided by two.

 

In January 2013, CLS recalculated its monthly data, resulting in non-material changes to volume figures by an average of 0.5%. The data above reflects this calculation.

 

 

FX volumes rise above $5 trillion in January – CLS

 

 

Average daily volumes in the foreign exchange market rose by more than 20 percent in January from a slow December, data from FX settlement system CLS showed.

 

The total daily volume of instructions submitted to CLS, combining settlement and aggregation services, was 1,210,588 up from 988,674 in December 2013.

 

The average daily value of transactions also climbed, by 8.6 percent to $5.3 trillion from $4.87 trillion.

 

 

 

CLS monthly settlement figures, January 2014

 

 

Total Input Volumes1 and Values in January 2014:
• The average daily volume submitted to CLS, combining the settlement and aggregation services, was 1,210,588, up 22.4% from 988,674 in December.
• The average daily value submitted to CLS was US$5.29 trillion, up 8.6% from US$4.87 trillion in December.

 

 

 

 

Input volumes are the number of instructions received by CLS on a given day for future settlement. Input instructions are not necessarily settled during the month in which they were submitted.

 

 

Note: CLS reports both sides of an FX transaction. To adjust the average daily value data to equate to the same reporting convention used by the Bank for International Settlements and the semi-annual foreign exchange committee market reports, the gross values should be divided by two.

 

 

In January 2013, CLS recalculated its monthly data, resulting in non-material changes to volume figures by an average of 0.5%. The data above reflects this calculation.

ITN interview with CLS

ITN interview with CLS for the British Bankers Association

CLS monthly settlement figures, December 2013

CLS Settlement Service and Aggregation Service Data:

 

Monthly Volumes and Values, December 2013

 

Total Input Volumes1 and Values

 

In December 2013:
• The average daily volume submitted to CLS, combining the settlement and aggregation services, was 988,674 down 9.6% from 1,094,020 in November.
• The average daily value submitted to CLS was US$4.87 trillion, down 0.4% from US$4.89 trillion in November.

 

 

 

Input volumes are the number of instructions received by CLS on a given day for future settlement. Input instructions are not necessarily settled during the month in which they were submitted. Note: CLS reports both sides of an FX transaction.

 

To adjust the average daily value data to equate to the same reporting convention used by the Bank for International Settlements and the semi-annual foreign exchange committee market reports, the gross values should be divided by two. In January 2013, CLS recalculated its monthly data, resulting in non-material changes to volume figures by an average of 0.5%. The data above reflects this calculation.