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The operational impact of CLS

CLS’ perspective

Presentation to FX Operations Managers Conference 20th & 21st April 2005, London

John Hagon, Director of Operations, CLS Services Ltd

Positive Impacts of CLS

• Settlement risk reduction

• Multilateral Netting

• Real time information

• Improved STP

• Information services

• Streamlining of confirmation process

• Matching

Positive Impacts of CLS• Reconciliation

• Increased processing scalability

• Reduction in fails

• Reduction in SWIFT costs for (MT202) payments

• Reduction in compensation claims

• Reduced operational risk (prep for BASEL II)

• Increased standardisation

Positive Impacts of CLS

• Easier and quicker diagnosis of problems

• Opportunity to rationalise Operations

• Resilience

• Single “Pipe”

…but there are some issues to address

• Funding and nostro costs need to be better managed

• We need to drive down unit costs

• We need to continue to mitigate the concentration risk

The Future for the Service

• Non-Eligible Currencies

• Non-Deliverable Forwards

• Option Premiums

• Credit Derivatives & Interest Rate Swaps

• Multiple Settlement Sessions

Input

Matching

Confirmation

Multilateral Netting

Settlement