triReduce FX

Multilateral portfolio compression for FX

Mitigate risk in the FX market, gain regulatory and economic capital benefits while reducing direct costs without changing your market risk positions.

Compression and connectivity

triReduce FX allows participants to reduce net bilateral exposures by offsetting them with new trades, all in one combined cycle. The service is available to all CLS settlement members, dealers, prime brokers and CLS third-party clients. Both CLS and non-CLS currency pairs are in scope and our clients can also take advantage of triReduce compression for NDFs, FX options and precious metals. triReduce FX has reduced gross notional by more than $27 trillion, helping our customers capture capital efficiencies as our network strengthens and expands.

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Meet volume thresholds and reduce direct costs

triReduce FX offers a platform for multiple institutions to regularly compress their portfolios, efficiently fulfilling the ESMA requirements for many counterparties simultaneously and allowing firms to manage gross notional exposures and redistribute counterparty exposure. Our multilateral compression engine is utilized to reduce outstanding gross notional whilst prioritizing compression of outstanding bilateral trades to help reduce bilateral net positions as much as possible, so that participants can optimize on SA-CCR and reduce gross notional at the same time.

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.

Features and benefits

Consistent

Our uniform compression process means your experience is the same regardless of the region or product.

Trusted

A reliable process underpinned by a robust legal framework.

Innovative

triReduce FX enables simultaneous optimization of gross notional, leverage ratio, SA-CCR and RWA

Improves leverage ratio

Improves the CRD4 element of the Leverage Ratio calculation under Basel III, which requires PFE add-ons for FX forward products.

Complies with ESMA requirements

Provides a platform for multiple institutions to compress regularly, which fulfills the ESMA requirements.

Extensive product coverage

Includes compression and optimization for all CLS currencies, non-CLS currencies, NDFs, FX options and precious metals

The process

Trade Submission and Matching
CLS provides all eligible forward-dated trade data for participating settlement members and third-party clients to triReduce. Participants confirm the trades eligible for compression and the net positions to be offset.

Dress Rehearsal
Participants set risk tolerances. The triReduce team delivers a dress rehearsal result for verification.

Live Execution
TriOptima runs its compression algorithm on the final set of trades using the risk parameters submitted by participants and recommends a set of termination and replacement/offsetting trades for agreement.

Downstream Processing
Settlement members rescind original trades, book replacement/offsetting trades, and submit settlement instructions to CLS in the same manner they submit all other FX instructions for settlement. Participants can elect to receive replacement trades via Thomson Reuters Trade Notification Service (TRTN).

Integrate and extend with innovative services

Explore our comprehensive range of related, intuitive, web-based services.

Optimize your OTC derivatives portfolio by lowering IM funding costs and SA-CCR capital requirements, freeing up collateral, and reducing systemic risk.

Calculate inputs, manage margin calls and resolve disputes. All with a single trade file.

Contact a TriOptima services expert

We’re here to help you configure our services to work for you.

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