CLS Group and ICAP Form Joint Venture for FX Trade Aggregation

CLS Group and ICAP are joining together to provide trade aggregation services to participants in the over the counter FX market. Subject to regulatory approvals the trade aggregation service is expected to be in operation by the middle of this year.

The joint venture, which will operate as a CLS subsidiary, aims to help reduce operational risk, realize and consolidate legacy post-trade processes and reduce post-trade costs in the global FX markets.

Several banks including Citigroup, Deutsche Bank, JP Morgan and Royal Bank of Scotland have committed to supporting the new venture.

The business venture will be 51 percent owned by CLS Group and 49 percent owned by ICAP. The technology will be provided by Traiana, an ICAP company, and offered through its Harmony Network.

In a statement, Mark Yallop, Chief Operating Officer, ICAP, said, “We have a real opportunity to strengthen the Foreign Exchange market infrastructure with this new joint venture with CLS. By bringing together the leading players in the industry and a sound technology platform, we can reduce risk and increase industry capacity to create the opportunity for very material further growth in the market.”

Rob Close, Chief Executive Officer of CLS Group and President and CEO of CLS Bank International, added, “CLS Bank is actively extending the coverage of its settlement risk elimination service - more participants, more currencies and more FX instruments. Additionally the most active players in the very fast growing high frequency, low value segment have very particular pre-settlement needs. CLS Group's new business with ICAP will contribute towards meeting these needs, which alongside the other CLS strategic initiatives on risk mitigation and efficiencies are designed to benefit the wider customer base and market.”