FX settlement services provider CLS Group and inter-dealer broker ICAP have announced they are creating a new joint venture to provide trade aggregation services to participants active in the over the counter FX market.

They aim to provide the means to reduce operational risk, rationalise and consolidate legacy post trade processes and reduce post trade costs in the global FX markets. It is designed to address the rapid increase in foreign exchange trading as an asset class by a widening group of hedge funds, algorithmic traders, retail and institutional market participants, which have brought substantially higher volumes to the foreign exchange industry.

The initial group of banks that have committed support to the joint venture are: Citigroup, Deutsche Bank, J.P. Morgan and Royal Bank of Scotland.

Mark Yallop, chief operating officer at ICAP, said: "By bringing together the leading players in the industry and a sound technology platform, we can reduce risk and increase industry capacity to create the opportunity for very material further growth in the market."