Issue 3 2021 ‒ Compression and Optimization Report


FTF awards 2021

We are delighted to have won Service Provider of the Year for the second consecutive year. Thanks to all of our customers for the support.

Record H1 for SGD compression

This year, our compression cycles have reduced the total SGD notional outstanding at LCH by 50%. Over the last 12 months, we have successfully terminated over SGD 3.5 trillion gross notional for 39 participants, including direct clearing members, clients, and clearing brokers.

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The Great Balancing Act: a discussion about the interplay between UMR and SA-CCR

Over the last decade, global regulators have introduced several measures in the OTC derivatives market designed to increase financial market resiliency and mitigate counterparty credit risk. SA-CCR is the most recent measure to come to market. Our panel of experts discuss challenges and solutions for optimizing both UMR and capital under the SA-CCR regime. and ways to reduce the size of capital buffers and initial margin funding costs.

Listen to the discussion

Multilateral SA-CCR optimization solutions

Reduce counterparty risk exposures in combination with other key priorities, simplify OTC derivative portfolios, and reduce the cost of maintaining them with these solutions.

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SA-CCR changes the game, but will it change how you play it?

The introduction of the SA-CCR regulations changes the metrics used for deriving capital costs, switching the focus to counterparty credit risk. Will this fundamental change in methodology impact trading behavior and post trade optimization?

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triBalance SA-CCR optimization

triBalance has been running monthly optimization cycles for nine months proactively managing SA-CCR and RWA exposures, while simultaneously optimizing initial margin.

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Webinar: Optimizing your business under SA-CCR

Wednesday, September 29
10:30 a.m. ET | 3:30 p.m. BST

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triBalance accelerating IM reductions

In 2021, triBalance has achieved an average 7% MoM growth (over 30% YTD) in initial margin reductions, providing our customers with increased capital efficiencies and reduced funding costs.

Source: TriOptima

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Korean won compression gains steam

Our latest Korean won compression cycle enabled a record 17 participating entities to compress 19.4% of total outstanding KRW notional at LCH, driving operational efficiencies and reduced risk and capital costs for our customers.

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Benchmark Conversion


First benchmark conversion cycle resulting in SARON risk replacement trades

We're seeing increasing interest in each of our compression cycles, especially in currencies with interest rate benchmarks subject to index cessation.

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triReduce completed first benchmark conversion with SOFR risk replacement trades

Our benchmark conversion service helps market participants proactively and iteratively reduce exposure to legacy indices in their OTC swap portfolios.

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Roadmap to a successful transition

Adoption of alternative RFRs and reductions in legacy benchmark exposure are expected to continue in 2021. Use our roadmap to take control of your portfolio and compress your swaps using triReduce's benchmark conversion service.

Review the roadmap

'Ask an Expert' video series

triReduce experts sat down with to answer questions about the proactive benchmark transition options available for your OTC swap portfolio.

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Mitigating the challenges of index cessation fallbacks and conversion

2021 has brought greater clarity over index cessation, the derivatives fallbacks, as well as the conversion mechanisms being proposed by CCPs for the impacted trades they clear. Focus can now shift to mitigating these impacts on your OTC interest rate derivatives portfolio.

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Webinar with Managing Benchmark Conversion for OTC Swaps Thursday, August 26
11:30 a.m. HKT

Our panel of industry experts will examine how market participants are transitioning their OTC swap portfolios in the Asia-Pacific region.

Register now