SsiSearch's CLS Listing Rule hits the market

The Listing Rule is a modification to the firm's CLS Directory, which enables its members to see which counterparties are using the continuous-linked settlement (CLS) service for FX, thereby eliminating the need for bilateral agreements. Under the rule, CLS Directory members must select one of three options to identify whether they are settling trades in CLS with all counterparties; with selected counterparties through bilateral agreement; or not settling directly through CLS at all.

Thomas Hjukström, director of strategic development at SSISearch in London, said this would eliminate the "leakage of trades" from the CLS community – the term used for CLS-eligible trades that are not settled on the settlement service.

This currently happens to some 10% of all potential CLS trades, said one CLS manager at a bank in London, with the result that a bank settles FX trades "the old way" with all its "old risks".

The addition of the Listing Rule also gives users of the CLS Directory a definitive alert that a new settlement member or third party has listed their settlement preferences – or that an existing CLS participant has changed their instructions, the firm said.

SSiSearch recently announced that it now has about 80% of the CLS Group's 55 settlement members contributing their reference data to its CLS Directory (FX Week, October 18). Some 110 of the 170 third-party CLS users are also on the directory, which lists banks' authenticated settlement reference data, updated every 60 days.

The firm also recently expanded outside its original focus on FX to launch a similar money markets reference data solution at the Sibos congress in Atlanta. Since launching this in early October, SSiSearch has signed up at least three banks to provide their data: Dublin-based Depfa Bank, Finland's Oko Bank and Bayerische Landesbank in Germany.

"Our efforts in helping some of the world's largest trading banks to reduce risk and improve efficiency in FX settlement led to a number of these customers highlighting the same basic need within these two markets," said Mike Convey, sales director at SSISearch. "The extension into these areas completes our initial offering and is the first step to achieving the company's ultimate goal of one central repository of authenticated reference data for all products traded in the financial sector."