TriOptima and SwapClear Include First Client-Cleared Trades in triReduce Swap Compression Cycle
TriOptima – London, New York – TriOptima, a leading provider of OTC derivatives post-trade risk management services and infrastructure, announces today that the first client-cleared trades were included in the most recent SwapClear compression cycle for Canadian Dollar (CAD) interest rate swaps. The entire CAD cycle had 18participants who eliminated $1.38 trillion CAD (US$ 1.05) in notional principal.
Client-cleared trades are trades that a Clearing Broker or Futures Commission Merchant (FCM) clears on behalf of market participants who are not direct members of a CCP. Citi, for example, is one of the first clearing brokers to offer the service to its clients. Until now only direct members of SwapClear could compress trades using the multilateral, risk-constrained triReduce service.
Including client-cleared trades in all future SwapClear triReduce compression cycles expands the participant base and liquidity pool, increasing compression efficiency. In 2015 SwapClear offered 45 triReduce multilateral, risk-constrained compression cycles. Hedge funds, asset managers and other financial firms, such as Citadel, will now have access through their FCMs or Clearing Brokers to the benefits of multilateral compression.
“We are pleased to participate in the inaugural triReduce cycle and to see TriOptima’s portfolio compression solutions become available to more market participants,” said John Naud, COO of Global Fixed Income for Citadel. “We have long supported buy side access to these solutions and look forward to the benefits that this will bring to the market.”
“Citi is happy to participate in the first triReduce cycle offered to our clearing clients,” said Christopher Perkins, Global Head of OTC Clearing at Citi. “Notional optimization and compression are paramount in today’s capital environment, and this capability will help contribute to a safer, more efficient marketplace.”
Cameron Goh, Global Head of Product and Service, Rates and FX Derivatives, LCH said: “This enhancement means that our clients now have even more opportunities to compress trades by accessing SwapClear’s large pool of OTC liquidity. We continue to see strong demand for compression services, and our buy-side clients are particularly keen on using these tools to maximize their operational efficiency. We’re pleased with the results of this first compression cycle, and look forward to further reducing the total notional outstanding through our work with TriOptima.”
“Including client-cleared trades increases the participant base in triReduce cycles and generates larger pools of eligible trades for compression, improving cycle efficiency and results for all participants,” said Peter Weibel, CEO of triReduce. “This also expands the benefits of risk, capital and operational cost reductions to a substantial new segment of market participants.”
The association supports the CFTC’s effort to establish new clearing mandates.
Centrally cleared and settled transactions have been in continuously increasing demand.
LCH SwapAgent registered over 10,000 trades in 2021, a five fold increase.
Overall trading volumes across all products fell 8% from 2020.
Klimpel won Excellence in Human Clearing at Markets Media Group’s 2021 Women in Finance (U.S.) Awards.