Quantile Unveils First Portfolio Compression Run for Swaps at LCH

Regulators have cited portfolio compression as one way for market participants to reduce risk in their trading.

Derivatives risk optimisation firm, Quantile Technologies Limited, today announced the completion of its first successful compression run with seamless execution at LCH, the multi-national clearing house controlled by the London Stock Exchange Group.

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The news is an important milestone for Quantile and follows its recent appointment as an Approved Compression Service Provider at LCH’s SwapClear service, which enhances the company’s risk reduction service for the derivatives industry. LCH started offering compression services in 2008 and Quantile was the first service provider to be given this status in nearly a decade.

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Swaps portfolio compression is the process by which clearing members and their clients can ‘tear-up’ offsetting trades to reduce the notional outstanding and number of line items in their portfolio.

SwapClear’s compression offering has significantly expanded the number of trades eligible for compression over the past few years. Quantile’s partnership with LCH provides a powerful union that allows market participants to significantly reduce counterparty credit risk and associated resources such as initial margin, across swaps, options and NDFs, among other asset classes and financial instruments.

Stephen O’Connor, Chairman of Quantile, commented: “By enabling a faster, more streamlined process for compression, we are delivering new efficiencies to our clients. We’re grateful that this has already generated extremely positive feedback from the major market participants.”

Daniel Maguire, COO of LCH, who was promoted today to CEO, added: “We are delighted to onboard Quantile as an additional compression partner, offering more choice to our members and their clients. Compression is an integral part of our ongoing efforts to improve capital efficiencies for market participants, and we are very pleased with the outcome of this first run. We look forward to doing more compression runs together with our mutual customers.”

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