CLS Group, the market infrastructure provider of risk mitigation services to the global FX market, has published its operating metrics for the month of February.
February was the largest month ever for trading activity passed through the CLS settlement service.
While this is clearly partly due to the market volatility seen at the start of February, there has been a sustained pattern of rising volumes through 2017 and into 2018. This seems to be driven by a significant increase in interest in settlement from the buy-side as institutions and growing awareness of FX risks from the buy-side.
The average daily traded volume submitted to CLS was USD1.949 trillion up 8% from USD1.805 trillion in January 2018.
|
Average daily traded volume submitted to CLS by product (USD trillion) |
February 2017 | January 2018 | February 2018 |
| Swap | 0.978 | 1.189 | 1.307 |
| Spot | 0.427 | 0.513 | 0.542 |
| Forward | 0.092 | 0.103 | 0.100 |
| Total average daily traded volume submitted to CLS (USD trillion) | 1.497 | 1.805 | 1.949 |
David Puth, CLS
David Puth, CEO at CLS, commented:
February was a record month for traded volumes at CLS. The steady rise in volatility coupled with a multi-year effort to bring new business to the CLS platform is evident through the record amount of activity. Average daily traded volume submitted to CLS was USD1.949 trillion, up 30% year on year, while the number of transactions was up 18% during that time.
Looking beyond February’s record figures, we have seen a steady increase in traded volumes submitted to CLS throughout the second half of 2017 and now well into March of this year.
The increase in volatility has led to greater activity at CLS. The addition of new members, new products and new third parties over the past several years has a leveraged impact on traded volumes at CLS. As volumes increase, an additional benefit is the reduced cost of an incremental transaction to our clients.
As the world’s leading provider of risk management and operational services to the foreign exchange market, CLS continues to invest in creating solutions for our clients and for the broad market.
Joe Ziccarelli, Global Head of Sales at CLS, added:
While increased market activity no doubt reflects ongoing market volatility, it also demonstrates a network effect of our direct market engagement, in particular with third party buy-side participants. As we continue to engage with the broader market and drive participation, we have seen substantial growth from the buy-side through the support and commitment of both global and local custodians as well as other third-party service providers.
As asset owners, regional banks, non-bank financial institutions and corporates become ever more acutely aware of the risks associated with currency settlements outside of CLS, we can expect traded volume and participation to continue to increase. In addition as we bring new solutions to the market, such as CLSNet which will allow direct participation across more than 125 currencies, clients can expect to materially benefit from even more improved liquidity, credit optimization, capital and operational efficiencies.