Post-trade derivatives services provider TriOptima has completed the first cleared inflation swap compression at LCH SwapClear. Reduce and optimize counterparty risk exposures. Relationships with CME, Eurex and other emerging clearinghouses are also in the works with participation expanding to buy side firms as well as dealers. Instead, beyond continued compression activity, TriOptima is embarking on a 12- to18-month period of education and onboarding for buy-side firms in preparation for a full-scale roll-out of the service in 2021, or when the market indicates its desire to commence conversion if there is a Libor fallback. Hear from active traders about their experience adding CME Group futures and options on futures to their portfolio. For example, investment firms and market operators providing portfolio compression are exempt from certain obligations like Best Execution or … TriOptima‘s triReduce service offers such a service, both within the energy industry and within banking. Henrik Nilsson is Head-Business Development at TriOptima AB. Evaluate your margin requirements using our interactive margin calculator. This page has been accessed 63,276 times. Implies modifying the Notional of an existing contract. TriOptima, a provider of multilateral compression services for OTC markets, set a new record for its triReduce portfolio compression service in 2018, having compressed $250 trillion gross notional value of trades at LCH SwapClear.. TriOptima’s compression service, triReduce, uses a hybrid of conservative and nonconservative compression, cycling through dealer and client trades and com-presses trades based on their own constraints, as well as constraints set by cus-tomers detailing the exposures they are open to taking on (TriOptima, 2017). Last week it completed a successful portfolio compression cycle … […] This enables quick and easy access to the services, and rapid delivery of results and reports after processing. Stream live futures and options market data directly from CME Group. Trade compression is not a new idea. Financial and Non-Financial Counterparties shall have procedures to analyse transactions compression feasibility in order to compress their portfolio and reduce the counterparty credit risk. TriOptima’s services are all centralized, web-based services that do not require any costly internal systems modifications or software installation. Trioptima’s latest compression cycle. Adding FX forward compression is an important expansion of the asset classes in our catalogue of compression services,” reiterated Peter Weibel, CEO of triReduce, TriOptima’s compression … TriOptima was founded in Sweden in 2000 to manage risk in derivatives. Create a CMEGroup.com Account: More features, more insights. View Henrik Nilsson’s professional profile on Relationship Science, the database of decision makers. TriOptima then uses its compression algorithm to produce an unwind proposal that respects all the tolerance limits specified by each participating dealer. A: The collaboration between CLS and TriOptima was fostered as international regulators encouraged compression services for non-centrally cleared OTC [over-the-counter] derivatives. CME Group is the world's leading and most diverse derivatives marketplace. These compression algorithms are implemented according to type of data you want to compress. triReduce, its portfolio compression service, was introduced in 2003 to eliminate outstanding notional principal of interest rate derivatives. Inflation swaps are a somewhat specialised corner of the IRDtrading world. TriOptima is the award-winning provider of critical post trade infrastructure and risk management services for the OTC derivatives market. TriOptima Sees Inaugural $664B Compression Cycle For MXN Swaps TriOptima has erased 35% of the cleared MXN notional principal outstanding in CME in its first compression cycle. TriOptima and CLS are leading providers of compression services. This page was last modified on 25 February 2020, at 13:13. CME Group’s TriOptima says it has reduced notional outstanding at Eurex Clearing by 26% following a record compression run on June 26, 2019. Search our directory for a broker that fits your needs. Securities Finance Times covers all the latest day-to-day news from the securities finance industry, exclusive interviews, features and country profiles $243tn of single-sided gross notional of IRD was outstanding (left hand chart) of which SwapClear was $190tn 2. © 2020 CME Group Inc. All rights reserved. Portfolio compression is an effective risk mitigation tool. TriOptima, which is owned by NEX Group, runs compression cycles for cleared and uncleared swaps, enabling swaps users to avoid millions of events in … TriOptima has always been a team of innovators from the first few dedicated members launching the company to the global presence of today. TriOptima’s core compression product, triReduce, continued to set new records in 2019. In our second example below the 4 original transactions would be replaced with one trade. Explore historical market data straight from the source to help refine your trading strategies. TriOptima and CLS are leading providers of compression services. Tailored compression. Per Sjöberg spoke with JLN’s Jim Kharouf about the changing landscape. The service combines our central role in the FX market with TriOptima’s compression expertise. Understand how CME Group can help you navigate new initial margin regulatory and reporting requirements. Manage the margin call and dispute resolution process and reduce risk through a single consolidated platform. Compression is a process of replacing multiple offsetting derivatives contracts with fewer deals of the same net risk to reduce the notional value of the portfolio. SwapClear $190tn total (right hand chart) was dominated by fixed float IRS, OIS, FRA, Basis totalling $185tn 3. The company was founded by Brian Meese and Derk Brouwer in … With tailored compression, the system attempts to derive a compression dictionary tailored specifically to the initial data written to the data set. The second type of compression is what Peter Weibel, CEO of TriOptima’s multilateral compression service, TriReduce, calls “risk constrained” compression, whereby trades with different maturity dates can be torn up, leaving a small residual change in market risk, fully controlled by a constraint set by the participating banks. Simplify compliance to initial margin requirements by providing SIMM™ inputs in-line with the latest SIMM™ model, including delta, vega and curvature calculations. The legislator had outlined in Article 31 of MiFIR a few requirements and aspects of Portfolio Compression already. Get the latest TriOptima services news, product information and more. Post trade infrastructure provider TriOptima, part of ICAP plc (LON:IAP), announces today that market participants have eliminated more than $750 trillion in notional principal outstanding via its multilateral compression service for OTC derivatives triReduce.. Published July 7, 2015. Originally in USD and EUR, the portfolio compression service expanded to 25 other currencies and to CDS (credit default swaps) and commodity derivatives. Learn why traders use futures, how to trade futures and what steps you should take to get started. TriOptima is a well known provider of operational and credit risk management tools to the financial industry. CLS Group, which provides risk mitigation and operation services for the global foreign-exchange market, and TriOptima, a technology company providing OTC derivatives post-trade and risk reduction services, are making improvements to the triReduce CLS FX Forward Compression Service.. Portfolio compression is a risk reduction technique in which two or more counter- parties terminate some or all of their derivative contracts and replace them with another derivative whose market risk is the same as the combined notional value of all of the terminated derivatives. It has been used in the OTC derivatives market for several years. The cycle took place on October 22, 2020 at LCH SwapClear. TriOptima was founded in 2000 in Stockholm. Portfolio reconciliation is a process of mutual trade and records comparison. The company is comprised of four Designated Contract Markets (DCMs). TriOptima’s compression service uses Icap, of which it is a subsidiary. Portfolio Compression. [3], Per Sjöberg of TriOptima Discusses the Changing Regulatory Environment & Portfolio Reconciliation & Compression TriOptima has been working with firms on both issues using its triResolve service for portfolio reconciliation and triReduce services, for portfolio compression. Peter Weibel, CEO of triReduce, TriOptima’s compression service, says: “It is more than just netting, compressed trades will actually cease to exist, eradicating the costs and risks associated with those trades. Portfolio Reconciliation. Save resources and increase precision using triCalculate XVA to price, report and validate your XVA risk calculations for OTC derivatives. Data Compression is a technique used to reduce the size of data by removing number of bits. Thus, you can begin to appreciate the unification as eurodollar, or “dollar”, becomes still further literally intangible. We’re here to help you configure our services to work for you. TriOptima, a NEX Group company, is the award-winning provider of OTC derivatives infrastructure services including triReduce and triResolve, and the Global OTC Derivatives Interest Rate Trade Reporting Repository (Rates Repository). As TriOptima advertises, their compression “pool” consists of 200 financial institutions worldwide as well as operating in 27 different currencies. We could probably double that if we looked at OIS data as well. Get quick access to tools and premium content, or customize a portfolio and set alerts to follow the market. TriOptima and CLS will offer compression for FX forwards. We collaborated with TriOptima to deliver triReduce CLS FX. TriOptima, however, compress between $19trn and $26trn each and every quarter. triReduce, its portfolio compression service, was introduced in 2003 to eliminate outstanding notional principal of interest rate derivatives. In our second example below the 4 original transactions would be replaced with one trade. TriOptima risk mitigation services Optimize resources, keep pace with regulatory requirements and implement market best practices with our suite of services. New collateral, clearing, and capital regulations in the U.S., Europe and Asia are driving OTC derivative market participants to shed as much of their gross notional exposure as possible through multilateral portfolio compression. With the growth of clearing, TriOptima began offering compression services for cleared trades in clearinghouses like LCH SwapClear, SGX and JSCC resultin… This technique uses various algorithm to do so. In IRS cycles, unwind proposals identify trades that will be completely or partially terminated to produce the compression results. Share this article. 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