ICAP has announced today that its TriOptima unit completed its first portfolio compression for SGX member banks. The banks using TriOptima’s suite of products eliminated 82% of interest rate swaps that they wanted to reduce. Since inception in 2003, TriOptima has eliminated over $227 in swaps and has continued to be a steady contributor to ICAP’s revenues this year, even as the interdealer has experienced a weak environment for its trading products. TriOptima, along with the Traiana division which services FX is part of ICAP’s Post Trade Risk and Information segment which has become a bigger part of the company in recent years.
TriOptima and four SGX members complete first portfolio compression cycle in Singapore clearinghouse
Singapore/ London/ New York – November 27, 2012 TriOptima announces that four SGX member banks successfully eliminated more than 82% of the SGD interest rate swaps they wanted to terminate in the first SGX triReduce portfolio compression cycle. The four participants, including two local institutions, reduced notional principal outstanding by $25 billion SGD in the inaugural compression cycle for cleared trades.
“We are pleased with how smoothly this initial compression cycle in SGX went,” said Lawrence Chan, Managing Director of Business Management and Support of Treasury and Markets, Development Bank of Singapore. “We view this as a natural extension of the bilateral compression cycles that TriOptima has offered in Singapore since 2004.”
“Our successful collaboration with SGX and its members demonstrates the benefits of using compression as a complement to the clearing process,” said Yutaka Imanishi, CEO of TriOptima Asia Pacific. “Regular triReduce cycles in the CCP ensures that exposures will be minimized even with the growth in clearing since a good measure of success in a CCP is turnover rather than accumulations of notional and trade volumes. We look forward to continuing our work with SGX and its members.”
Separating Yourself From the Pack in a Mature FX IndustryGo to article >>
Eliminating unnecessary swaps in an OTC derivatives clearinghouse promotes the efficient use of capital and collateral and contributes to overall financial stability by moderating the pace of growth in outstanding notional principal in the market.
TriOptima, an ICAP Group company, is the award-winning provider of OTC derivatives post-trade risk management services including triReduce, triResolve and the recently-launched triBalance.
triReduce, the portfolio compression service for OTC derivative dealers, offers a range of multilateral compression services across asset classes that eliminates counterparty and operational risk and reduces operational and capital costs. Serving over 163 bank and non-bank subscribers worldwide including the major local and global dealers in derivatives, triReduce is a critical tool for maintaining post trade processing efficiency for both cleared and uncleared trades. triReduce offers compression cycles in single name and index CDS swaps worldwide, IRS swaps in 25 currencies, and a range of commodity derivatives.
triResolve is a network community service that provides counterparty exposure management services including proactive portfolio reconciliation of OTC derivative portfolios, margin call management, and dispute resolution. Used by more than 250 firms including all global dealers, regional banks, asset servicers, and buy-side firms, triResolve regularly reconciles 6.3 million trades representing over 90% of all collateralized OTC derivative transactions globally. The service benefits trade control, settlement, documentation, collateral and counterparty credit risk functions.
triBalance, TriOptima’s latest post trade service innovation, facilitates proactive counterparty risk management by rebalancing counterparty risk exposure between multiple CCPs and bilateral relationships (in Rates, Credit and Commodities) enabling an efficient use of capital and collateral and reducing systemic risk.
TriOptima maintains offices in London, New York, Singapore, Stockholm, and Tokyo.