CLS and TriOptima debut FX compression service
CLS Group and TriOptima will be providing FX forward compression
FX services provider CLS Group and OTC derivatives specialist TriOptima are collaborating to launch an FX forward compression service, which they say will help customers to meet the regulatory obligation to use compression for non-centrally cleared OTC derivatives if possible.
FX forward transactions currently account for 13% of overall trading in the global FX market, according to the Bank for International Settlements, and trading volumes have risen by 43% between 2010 and 2013. The new service aims to help market participants to reduce the number of trades effectively, limit their gross notional exposures and therefore reduce counterparty credit risk and leverage ratios, while ensuring compliance with EMIR, Basel III and Dodd-Frank.
“International regulators have recognised the importance of portfolio compression from a risk mitigation perspective, said David Puth, chief executive at CLS. ” The new service will significantly reduce exposure to risk and provide numerous operational and cost efficiencies that will help participants to comply with international regulatory requirements.
CLS and TriOptima plan to begin offering the service later this year, subject to any necessary approvals.
