CLS and TriOptima Jointly Unveil FX Compression Service, triReduce

CLS Group, a provider of risk mitigation and operational services, has teamed up with over-the-counter (OTC) derivatives specialist TriOptima, to jointly launch the triReduce CLS Forward FX Compression Service.

The triReduce CLS Forward FX Compression Service helps consolidate CLS’s robust foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (FX) infrastructure as well as its market connectivity capabilities with TriOptima’s triReduce compression product. The end result is the capacity for counterparties to better reduce the gross notionals of their respective outstanding portfolios absent of any changes or schisms across their market positions. The service has also just completed its first successful compression cycle for FX forwards and Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term transactions.

The triReduce CLS Forward FX Compression Service has been unveiled and launched in the middle of a period of regulatory changes that are currently enveloping the market. This rings especially true across clearing for OTC derivatives, which has pushed for several specialized compression services.

In particular, the triReduce CLS Forward FX Compression Service was designed to help streamline operational, credit and counterparty risk for institutions, whilst bolstering capital efficiency. These considerations will be instrumental ahead of the regulatory benchmark goals stipulated under EMIR, Basel III, and Dodd-Frank.

According to Tobias Becker, Capital Management Trading at Credit Suisse, in a recent statement on the launch: "Being able to compress FX forwards and swaps has the potential to not just simplify derivative portfolios and notionals but ultimately also to reduce counterparty exposure and costs. We welcome any initiative that helps increase the efficient management of FX derivatives in the marketplace."

“Trade compression is a vital tool in managing risk, leading to strong market demand for a compression service for FX forwards and swaps,” noted David Puth, CEO of CLS, in an accompanying statement.

“By combining CLS’s infrastructure, network and expertise in the FX market with TriOptima’s knowledge of the OTC derivatives environment and experience with compression in other asset classes, this new service enables institutions to efficiently reduce counterparty and credit exposure and to meet global regulatory requirements,” he added.

“Working with CLS and its members underscores our commitment to providing robust and efficient compression services to a broad range of financial market participants. 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 service.