Capitolis Integrates LCH’s Clearing Solution to Optimize FX Markets

<p>Fintech firm Capitolis has tapped the optimization
solution of the British clearing house, LCH, to enable banks optimize their
risk management in the FX industry, particularly in FX forwards, swaps, and
cross-currency swaps.</p><p>According to the
company's statement released today (Tuesday), integrating LCH's FX Smart Clearing solution will enable banks, through Capitolis' technology, to find the ideal capital and funding state between cleared and uncleared markets by moving optimized trades where they fit best. </p><p>Multi-Lateral
Optimization</p><p>"Combining FX Smart Clearing with our post-trade
optimization technology is the ideal approach to managing capital for our
customers," said Gil Mandelzis, CEO and Founder of Capitolis.
"The relationship with LCH ForexClear, coupled with our network of
participating global banks, is a sophisticated and advanced model for the
industry, bringing multi-lateral optimization to the next level by including a
<a href="https://www.financemagnates.com/terms/c/clearing/">clearing</a> node."</p><p><a href="https://www.financemagnates.com/tag/capitolis/" target="_blank" rel="follow">Capitolis</a> said it demonstrated the benefits FX Smart Clearing will add to its existing
Standardized Approach to Counterparty Credit Risk (SA-CCR) through partnerships with nine banks. The
proof-of-concept reached a network yield of 42% of the total funding costs,
including the funding for capital. SA-CCR is a methodology that measures
counterparty credit risks.</p><p>Furthermore, <a href="https://www.financemagnates.com/fintech/lch-breaks-clearing-volume-record-in-2021/" target="_blank" rel="follow">LCH</a> expects to take advantage of the new initiative in partnership with
Capitolis to reach more market participants for them to benefit from ForexClear.
"FX Smart Clearing is another tool we are providing for banks to
financially optimize their resources, unlock capital constraints and help to
ensure a safe and efficient financial system," commented James Pearson,
Head of LCH ForexClear.</p><p>Capitolis Targets Global
Banks</p><p>Founded in 2017, Capitolis aims to support banks as well as the institutional investors. The New York-based
company counts venture capital firms, including Andreessen Horowitz and Sequoia
Capital, as some of its investors.</p><p>Meanwhile, <a href="https://www.financemagnates.com/" target="_blank" rel="follow">Finance Magnates</a> recently <a href="https://www.financemagnates.com/institutional-forex/euronext-to-sell-lch-sa-stakes-for-111-million/" target="_blank">reported</a> that the pan-European stock exchange,
Euronext, announced the decision to sell its majority stake in LCH SA. The stake
will be purchased by LCH Group Holdings for €111 million and the sale is expected to be
finalized in July 2023. </p><p>Euronext acquired LCH SA
in 2017 through a share swap deal where Euronex swapped its 2.3 percent
ownership in LCH Group for an 11.1 percent stake in LCH SA. The latter is a
clearing house based and regulated in France.</p><p>TradingView integrates FYERS; Crypto.com opens innovation lab; <a href="https://www.financemagnates.com/forex/news-nuggets-27-june-tradingview-integrates-fyers-cryptocom-opens-innovation-lab/" target="_blank" rel="follow">read today's news nuggets</a>.</p>

This article was written by Jared Kirui at www.financemagnates.com.