Quantile Finishes First NDF Margin Optimization Cycle with CME

Quantile Technologies, a derivatives risk optimisation firm, announced the the successful completion of its initial non-deliverable forward (NDF) margin optimisation cycles with CME Group.

"By adding CME Group to our optimisation service we are able to amplify the risk reduction opportunities across our network, generating increased capital and margin benefits for all of our clients," said Andrew Williams, CEO of Quantile. "The significant reduction in risk, and margin savings from this cycle are clear examples of the efficiencies that can be generated by taking part in these multi-dealer and multi-CCP processes.”

Quantile analyses clients’ trade data to create transaction solutions that reduce counterparty risk. According to the firm, this results in lower capital and margin costs for derivative market users and increased market Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term.

The company’s margin optimisation service enables dealers to benefit from the different product offerings and netting sets available at different clearing houses.

Quantile - Reducing Margin Obligations

Quantile claims that adding CME Group to their optimisation run reduces clients' margin obligations by using different Central Counterparties (CCPs). Currently, Quantile's optimisation service is live at the G15 dealers, CME Group and the London Clearing House Clearing House A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e Read this Term.

The cycle that was just completed saw CME Group generate over $1.2 billion in NDF clearing across a number of different currency pairs from several banks including Citi and Standard Chartered.

“Standard Chartered has always sought to take advantage of every opportunity that will reduce the use of scarce resources,” said Matt Turner, Director, XVA Trading at Standard Chartered. “Since the commencement of the optimisation cycles we have seen significant savings in our overall margin requirements and by widening the number of participants, we see potential for increasing this benefit further.”