CLS Update European OMG Meeting 13 February 2008

Transcription

1 CLS Update European OMG Meeting 13 February 2008 Joe Halberstadt Senior Product Manager CLS Services Ltd. CLS and the CLS Logo are registered trademarks of CLS UK Intermediate Holdings Ltd 2008 CLS UK Intermediate Holdings Ltd.

2 Agenda CLS Business Update FX Volume growth NDF Protocol 2

3 Nov-02 Jan-03 Mar-03 May-03 Jul-03 Sep-03 Nov-03 Jan-04 Mar-04 May-04 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 CLS today Shareholders Members Third Party Providers Third party growth 1 January 2008 Total:2195 Banks: 296 Corporates: 21 NBFI: 51 Fund accounts: 1827

4 Average daily CLS volumes settled by base currency value bands 250, , , , , Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sep 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 < 1m = 1m > 1m and < 2m = 2m > 2m

5 Average daily values gross and net 4,500, % 4,000, % 3,500, % 3,000,000 2,500, % 60.00% 50.00% 2,000, % 1,500, % 1,000, % 500, % 0 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec % Average daily Gross Value. Average daily Same day Value. Average daily net pay-in (initial schedule). Average daily net pay-in (final schedule). M ultilateral netting reduction. Same Day Liquidity Reduction (I/O Swaps). 5

6 Currency coverage - Eligible currencies & NDFs CLS eligible NDF reference currency and potential eligible currency CLS eligible 2008 NDF reference currency 6

7 Agenda CLS Business Update FX Volume growth Challenges Ongoing growth NDF Protocol 7

8 FX Volume Growth - Challenges Maintain CLS performance Performance enhancements being brought online Support for 1M average / 2M peak Instructions during 2008 Support Members Extend deadlines to support Members with backlogs Members working to improve B/O performance 8

9 FX Value Growth - Challenges Gross values increased alongside, although slower than, volumes Currently around $3.8 Trillion Peaked at $8.7 Trillion in December Average net pay-in increased from ~$37Bn to ~$61bn over 2007 Peaked at $112 Billion in October CLS Treasurers Group and Liquidity Taskforce - actions Improving I/O Swap efficiency Analysing sources of imbalances Investigating additional liquidity management tools 9

10 Ongoing Growth Members expect FX market to continue growth curve Market concentration in small number of major players Continued growth in CLS capacity New service platform Migration of FX to CLS2 infrastructure CLS working with Members to improve FX market efficiency CLS FX pre-settlement services Use the CLS system as an information warehouse 10

11 CLS FX warehouse solution - overview CLS keeps both existing and new options available to members to allow complete flexibility of timing and scope of adoption according to each bank s requirements Existing Gross Input Solution Gross Trade Input with Net Position Reports Solution Front Office Trade Information Gross input Venue CLS Matching Engine Trade Information Reconcile Gross input Economic impacts Front Office Back Office Reconcile CLS Warehouse Economic impacts Back Office Reconcile CLS Multilateral Net & Settle Reconcile 111

12 Agenda CLS Update FX Volume growth NDF Protocol 12

13 CLS NDF value proposition Standardisation SWIFTNet FIN and XML message standards Straight through processing post-trade confirmation through to settlement Elimination of long-form confirmations multilateral master confirmation protocol for NDF instructions Reduction in payment operational risk Integrated with FX settlement 13

14 CLS NDF product scope 15 settlement currencies, 48 reference currencies EMTA templates for 13 currency pairs. More under development. elimination of long-form confirmation and bilateral master confirmations Confirmation matching opening Linking and matching of valuation Multilateral net settlement of settlement currency included with FX settlement Support for User Members third party services fund managers and custody trades 14

15 Production - Reference Currency distribution 30.00% 25.00% 25.25% 20.00% 17.82% 16.83% 15.00% 11.88% 10.00% 5.00% 0.00% 5.94% 5.94% 3.96% 3.96% 2.97% 1.98% 2.48% 0.50% 0.50% ARS BRL CLP CNY COP IDR INR KRW MYR PEN PHP RUB TWD 15

16 NDF product status February 2008 Unscripted settlement commenced Dec 07 Second wave planned for Q Later adopters to follow in H Including Third parties Fund Managers 16

17 CLS Protocol for NDF instructions Generic Multilateral Master Confirmation published 31 October 2007 FMLG / FXC OMWG / JSC OMG CLS Protocol for NDF instructions drafted under review by FX industry groups launch expected February EMTA NDF templates published for 13 currency pairs further templates under development CLS NDF service + CLS NDF Protocol + EMTA templates = Elimination of long-form confirmations for NDF 17

18 Questions? CLS and the CLS Logo are registered trademarks of CLS UK Intermediate Holdings Ltd 2008 CLS UK Intermediate Holdings Ltd.