Russia’s Alfa-Bank and UAE’s First Abu Dhabi Bank Join CLSNet

Financial market infrastructure provider, CLS announced on Wednesday its partnership with two new banks, Alfa-Bank and First Abu Dhabi Bank, that agreed to use payment netting calculation services CLSnet.

First Abu Dhabi Bank is the United Arab Emirates’ largest lender, and Alfa-Bank is based in Russia. Both are the first lenders in their country to join the service and have agreed to initiate onboarding to CLSNet.

The new banks have joined the likes of Bank of America, Bank of China (Hong Kong), BNP Paribas, Citibank, Goldman Sachs, JP Morgan, Morgan Stanley and a few others as the users of the CLS’s services.

“The addition of these emerging market leaders demonstrates the appeal of CLSNet to FX market participants trading in emerging market currencies,” CLS’s Global Product Head, Keith Tippell, said. “Given the sharp focus on settlement risk mitigation across the industry, CLS is investing further in evolving CLSNet to ensure broad-based adoption and explore new functionality related to Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term optimization and payment certainty.”

Based on a distributed ledger technology (DLT), CLSNet standardizes and increases the levels of payment netting in the Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term market. Banks are taping the service to improve intraday liquidity and increase risk mitigation for non-CLS-settled currencies.

The service can be used by both settlement members and non-CLS banks and the buy-side.

Improving Settlement with Local Currencies

Andrew Chulack, Alfa-Bank’s Deputy Chairman, commented: “Our participation in the service will be integral to our ability to improve operational efficiency and reduce risk for the currencies that we trade, particularly the Russian ruble, which is not currently eligible for settlement in CLS.”

“Being the first mover in the Middle East showcases FAB’s commitment to embrace innovation, particularly as a specialist in emerging markets,” FAB’s Anan Samaneh added. “We hope our vision to constantly grow stronger will spur other organizations in the region to similarly participate in this netting and confirmation system and improve standards across the board.”