Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013
Currency Cogs

30044

Nomura Asset Management provides access to CLSSettlement for Japanese domiciled funds

RELATED TOPICS​

Nomura Asset Management Co (NAM) has become the first asset manager headquartered in Japan to provide access to CLSSettlement for Japanese-domiciled funds. 



NAM is working with three trust banks: The Nomura Trust and Banking Co (NMTB); Japan Trustee Services Bank (JTSB); and The Master Trust Bank of Japan (MTBJ), to offer CLSSettlement to a total of 21 investment trust funds. NAM and the trust banks are supported by a number of global custodian banks, including Brown Brothers Harriman & Co. (BBH) and Citibank, NA (Citi) for NMTB, with Sumitomo Mitsui Trust Bank (USA) Limited for JTSB, and BBH for MTBJ.
 
While large banks and securities companies in Japan are already settling FX trades in CLSSettlement, asset managers and pension funds have not, until recently, because Japanese-domiciled fund FX transactions involve many stakeholders such as trust banks, asset managers, global custodians and counterparty brokers. Following guidance from the Basel Committee on Banking Supervision recommending the use of payment-versus-payment (PvP) settlement and netting where appropriate to all market participants, the Financial Services Agency of Japan along with Bank of Japan brought together Japanese wholesale FX market participants to promote PvP settlement and assist the industry in adopting CLSSettlement. This latest development marks another significant milestone for the coordinated industry-wide effort to onboard the Japanese buy-side community to CLSSettlement.
 
Margaret Law, Head of Client Management – APAC, CLS says: “We are seeing increased interest in the mitigation of settlement risk by the asset management community in Japan, and in Asia Pacific more generally, as a result of the operational best practices which are being expected by end clients and promoted by drivers such as the FX Global Code. The latest announcement around the buy-side take up of CLSSettlement in Japan is testament to this trend and we expect an ongoing increase in participation in the region as a result.”
 
Kunihisa Ono, Managing Director of NAM Trading Dept, says: “We are pleased to be the first asset manager headquartered in Japan to provide Japanese domiciled funds access to CLS Settlement. We are managing a wide range of funds and trading foreign exchange with both domestic and foreign counterparties. We need to mitigate settlement risk, and think that CLS is effective in that respect. We are preparing to further expand CLS settlement in the future.”
 
Toshikatsu Furumi, Managing Director and Head of Prime Future Securities Services in Citi Japan says: “Citi has been supporting NMTB from very early stage of the implementation project. Citi has facilitated end-to-end testing of CLS settlement for NMTB with its major FX counterparties, fully taking advantage of CLS Bank’s JAS testing environment connected to Citi’s testing environment, so that NMTB fully gets comfortable entering into production phase. There is increasing appetite amongst our buy-side clients to mitigate settlement and operational risk and we are pleased to be able to support our clients in achieving this as a major direct CLS participant since its establishment.”
 
Japan is one of the world’s largest centres for currency trading and a crucial hub for the Asian FX community. The Japanese FX market accounts for 6.1 per cent of global over-the-counter FX turnover. In recent years it has benefitted from a significant increase in cross-border currency flow and foreign direct investment, but this has also increased exposure to a wider range of market participants including funds and their counterparties.

Latest News

Irish domiciled funds surpassed EUR4.3 trillion AuM (Assets under Management) at end-March 2024, a 15..
New analysis by London-based Nickel Digital Asset Management reveals 38 listed companies with a combined..
Bloomberg has announced that for the first time, its proprietary Bloomberg Second Measure (BSM) transaction..

Related Articles

Global ESG Investing
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of climate change and ESG factors in state policymaking...
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of..
Trends
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100 million deals announced this month alone...
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100..
Different flavours
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led, multi-boutique global asset manager with over USD20 billion under management, recently undertook a survey with 204 UK investment professionals, seeking insights into their perceptions and attitudes towards boutique asset managers...
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led,..
UK map
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be worth billions of pounds in the coming years...
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by