Market infrastructure CLS has announced that Sumitomo Electric Industries (SEI) has become the first Japanese manufacturing company to access CLSSettlement as a third-party participant.
SEI is ranked in the Fortune Global 500 and has a diverse global business portfolio in the automotive, infocommunications, electronics, environment and energy, and industrial materials segments. The company is settling its FX transactions in CLSSettlement via its third-party service provider, Sumitomo Mitsui Banking Corporation (SMBC), supported by Bloomberg’s FX Confirmation Matching Service (CMS) post-trade processing technology.
SEI’s participation highlights the continued growth in CLSSettlement third-party participants in Japan. This momentum has been driven by a number of factors: since 2018, the overall number of Asia Pacific third parties (regional/third-party banks, funds, corporates and non-bank financial institutions) participating in the settlement service increased by 15% while respective average daily gross values settled increased by 17%. In that same time period, the average daily gross values settled by third-party corporates in the region also increased by over 75%.
“There is increasing appetite amongst our corporate clients to mitigate settlement and operational risk and we are pleased to be able to support our clients in achieving this,” said Takamasa Matsubaya, Senior Vice President of Transaction Products Development Department at SMBC.
“Our CMS solution provides post-trade connectivity between execution and settlement for institutions that are not SWIFT-enabled, allowing them to access CLSSettlement,” commented Tod Van Name, global head of FX Electronic Trading at Bloomberg. “SEI’s adoption of the suite of Bloomberg FX solutions optimises their treasury workflow and achieves advanced automation while meeting the internal market standard with significantly reduced risk.”
“Large, multinational corporations are increasingly looking for effective, robust and sustainable solutions to enhance the way they manage risks, cash management, liquidity demands and efficiencies in their multicurrency operations,” added Margaret Law, head of Client Development Asia Pacific at CLS. “This latest development highlights the continued strong demand from the non-bank community for CLS’s services.”
Japan is one of the world’s leading export countries and cross-border capital flows (such as project finance and M&A) are very active. Accordingly, the corporate FX turnover in Japan is one of the largest globally, with an average daily volume of US$22.3bn according to the BIS Triennial Central Bank Survey of Foreign Exchange and Over-the-counter (OTC) Derivatives Markets in 2019. Adopting global best practices for risk mitigation and improving operating efficiencies remains a key priority for all participants.
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