Conference Dailys TRADETech FX Daily 2018 Wrap-up | Page 8

THETRADETECHFX DA I LY
interview
THE BIG INTERVIEW:
ALAN MARQUARD
CHIEF STRATEGY AND DEVELOPMENT OFFICER AT CLS, ALAN MARQUARD, SITS DOWN WITH THE TRADETECH FX DAI-
LY TO DISCUSS THE BUY-SIDE’S INCREASINGLY ACTIVE ROLE IN FX SETTLEMENT, THE IMPORTANCE OF THE FX GLOB-
AL CODE OF CONDUCT FOR THE INDUSTRY, AND PROVIDE AN UPDATE ON CLS’ RECENT BLOCKCHAIN PROJECTS.
What are some of the settlement challenges
your buy-side clients are currently facing? And
would you agree the buy-side is increasingly
more active in managing settlement risk?
Alan Marquard: A key challenge for the
buy-side is reducing costs. Part of that can
be achieved through improving operational
efficiency, but there is also a drive towards so-
phistication of understanding trade processes
and quality of client service levels, as well as
ensuring appropriate levels of risk mitigation
and risk management. With that comes a
need for greater visibility into every step of
the trade lifecycle.
The buy-side is evidently more focused on
managing settlement risk, and the reason we
know that is two-fold. Until a couple of years
ago, CLS dealt almost exclusively with its
settlement members, but in the last couple
of years we have proactively talked with the
buy-side and heard first-hand the increased
focus on settlement risk mitigation. Also, we
have seen greater use of the CLSSettlement
service. For example, over the past year, the
average gross value settled by third-party
participants has increased by 18%. In addition
to the organic growth in activity in the FX
market as a whole, we see the buy-side as a
sector becoming more active.
To help with the need for greater visibility,
we recently launched CLSTradeMonitor,
which allows non-settlement members, or
those without direct access to CLSSettle-
ment, to see the matching and settlement sta-
tus of their own trades. Previously they had to
rely on an intermediary for this information.
The buy-side now wants to understand their
liquidity and settlement risk positions in
real-time.
What has been driving the increase in traded
volumes seen at CLS so far this year?
AM: The key driver has been increased
volatility in the FX market due to ongoing
geopolitical themes. That uncertainty creates
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THETRADETECHFX DAILY
Issue 2