Société Générale has successfully gone live on CLS’s cross currency swaps (CCS) service, marking a significant step forward in reducing settlement risk and improving operational efficiencies for the bank. Cross currency swaps often involve large principal exchanges, leading to significant settlement risks and operational challenges when settled on a gross bilateral basis. By leveraging CLS’s CCS service, Société Générale can now seamlessly integrate CCS flows into CLSSettlement, benefiting from multilateral netting across all foreign exchange (FX) transactions. This results in enhanced liquidity management and reduced daily funding requirements.
Société Générale Goes Live on CLS’s Cross Currency Swaps Service
The CCS service has been experiencing rapid growth, with the value of CCS transactions submitted to CLSSettlement increasing by 87% year-on-year in Q3 2024. This growth highlights the growing interest in solutions that mitigate FX settlement risk, reflecting broader industry trends and regulatory pushes for payment-versus-payment (PvP) mechanisms. PvP systems are widely regarded as essential tools for reducing systemic risk in the over-the-counter (OTC) derivatives market.
Lisa Danino-Lewis, Chief Growth Officer at CLS, expressed her satisfaction with the new partnership: “We are happy that Société Générale has gone live on our CCS service. Participation in the service demonstrates its effectiveness in enhancing liquidity and operational efficiencies for CCS trades. The increasing adoption of this service underscores the industry’s commitment to reducing settlement risk and improving overall operational efficiency.”
Pierre-Jean Benazech, Global Head of Cross Currency Swaps Trading at Société Générale, also commented on the strategic benefits of joining the service: “We look forward to leveraging CLS’s CCS service to optimize liquidity and mitigate settlement risk. The unique PvP settlement system and netting capabilities are key to advancing our efforts to streamline foreign exchange operations.”
This partnership further strengthens CLS’s role in the global FX market, driving innovation and reinforcing the industry’s focus on reducing systemic risks.
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