CLS and TriOptima compress US$1 trillion in FX forwards and swaps

CLS Group (CLS), a provider of risk mitigation and operation services for the global foreign exchange (FX) market, and TriOptima, a NEX Group (LON:NXG) business which lowers costs and mitigates risk in OTC derivatives markets, just announced that counterparties have eliminated US$1 trillion in gross notional value from their FX forward and swap portfolios using the triReduce CLS FX Forward Compression Service.

The triReduce CLS FX Forward Compression Service offers regular compression cycles to reduce operational, credit, and counterparty risk, and enhance capital efficiency. Participation has grown steadily, with the last two cycles reducing notional principal by more than US$200 billion, a trend that both companies expect to continue.

An upgrade to the service scheduled for the coming months will offer standard multilateral compression and introduce the ability to achieve net exposure reduction by adding new, offsetting trades. This enhancement enables both prime brokers and dealers to achieve significant risk reduction and manage their leverage ratios effectively.

David Puth
Chief Executive Officer at CLS Group

David Puth, CEO of CLS, commented:

This is a significant milestone for the compression service which has shown substantial growth over the last year, both in the number of participating banks and in the amount of notional reduced. The enhancement to the service will create additional value for our clients, enabling them to further improve their leverage ratios and significantly reduce risk in the FX market.

The increased interest in the triReduce CLS cycles over the last few months has been impressive. A dozen participants now regularly use our service to reduce outstanding notional and line items while additional banks continue onboarding the service”, added Peter Weibel, CEO of triReduce. “This new service enhancement is a great win for our clients who will now be able to both compress trades and offset exposure with new trades where required, all in the same cycle.”

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