TriOptima Completes First triReduce Compression Cycle for Cleared Mexican Peso Swaps at CME Group
triOptima – London – TriOptima, a leading provider of OTC derivatives post-trade risk management services and infrastructure, announces today that 11 CME Group IRS clearing members eliminated 12.5 trillion MXN ($664 billion USD)* notional outstanding in the first triReduce multilateral compression cycle for cleared Mexican Peso (MXN) interest rate swaps (IRS).
Over 35% of the cleared MXN notional principal outstanding in CME was eliminated in this cycle, the first ever compression in a cleared Latin American currency.
TriOptima has offered compression for uncleared MXN trades since 2007, and has completed 20 MXN cycles including this most recent one for CME Group IRS clearing members. TriOptima has also run six triReduce compression cycles in uncleared Brazilian Real (BRL) and Colombian Peso (CLP).
TriOptima and CME Clearing have collaborated on six other compression cycles for IRS clearing members in USD and EUR, with additional currencies planned. The total gross notional outstanding eliminated in these seven joint cycles is $15.8 trillion.
“Mexican Peso swap clearing at CME Group is an exciting innovation we’ve delivered for our customers, and we’re pleased to work with TriOptima to deliver even greater capital efficiencies to the marketplace,” said Sunil Cutinho, President of CME Clearing. “With bilateral swaps facing higher capital costs and the implementation of uncleared margin rules starting September 1, the combination of voluntary clearing and multilateral compression provides significant value to our clients.”
“TriOptima continues to work closely with the CME Clearing to expand the range of compression services offered to their IRS clearing members and others,” said Peter Weibel, CEO of triReduce. “Eliminating trades is an important tool for improving capital efficiencies and operational processes.”
Phase 5 of the uncleared margin rules (UMR) took effect from September 2021.
Temporary equivalence is set to expire on June 30 2022.
IRS trading volumes have fragmented without an equivalence agreement.
Phase 5 of the uncleared margin rules came into effect on 1 September.
Triparty repos can be executed across U.S. Treasury securities to central clearing.