TriOptima & CLS Eliminate $9.1t in Compressed FX Forwards

The companies set a new record for the triReduce CLS FX Forward Compression Service.

TriOptima, part of the CME Group, announced this Tuesday that, through its cooperation with CLS, the companies jointly eliminated $9.1 trillion of gross notional value from their outstanding FX forward and swap portfolios – a new record for the triReduce CLS FX Forward Compression Service.

The triReduce CLS FX Forward Compression Service helps consolidate CLS’s robust foreign exchange (forex) infrastructure as well as its market connectivity capabilities with TriOptima’s triReduce compression product. The service was originally set up back in 2015.

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The total value compressed – $9.1 trillion, is 71 percent more than what was compressed in the prior year. In the final quarter of 2014 alone, the service compressed $4.9 trillion of gross notional value. This represents an increase of 153 percent above the next highest quarter – Q3 of 2018.

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TriOptima: Increased year-end activity drove performance

According to a press release published by TriOptima, the new record was driven by increased participation from the prime broker and executing broker community. Furthermore, the increased year-end activity also contributed to the solid performance.

Speaking on the results, Guy Rowcliffe, Global Head of Optimization Services and TriOptima, CME Group, said in the release: “As FX forwards volumes continue to grow, and in response to capital rule changes and increased regulatory interest in FX compression, clients have a greater need for flexible risk mitigation services to achieve capital and operational efficiencies. We are pleased with this new milestone for FX forwards compression and look forward to extending our service offering in 2020.”

“The increase in notional reductions seen in 2019 demonstrates the value triReduce CLS FX continues to deliver for our clients,” added Alan Marquard, Chief Business Development Officer, CLS. “It enables them to further improve their capital efficiencies and significantly reduce risk, while contributing to the smooth and efficient running of the FX market.”

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