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TriOptima and LCH.Clearnet complete SA compression cycle

First Published 6th October 2014

TriOptima and LCH.Clearnet's SwapClear complete the first South African rand compression cycle for cleared swaps.

Daniel Maguire, global head, SwapClear

Daniel Maguire, global head, SwapClear

"Compression is gaining momentum as the participation in this first triReduce and SwapClear ZAR cycle demonstrates."

New York, London - TriOptima, provider of OTC derivative post trade services, has announced that LCH.Clearnet's SwapClear members have eliminated $284.3 billion in notional in the first triReduce and SwapClear compression cycle for cleared South African rand (ZAR) interest rate swaps.

The $284.3 billion in notional represents 25% of SwapClear's outstanding ZAR notional and the 18,000 trade sides terminated accounted for 31% of its outstanding ZAR trade count.

With the completion of the ZAR cycle, TriOptima and SwapClear now offer multilateral triReduce compression cycles in 10 currencies. Since May 2014, five currencies have been added, beginning with AUD and CAD in June, HUF* in July, PLN** in August, and ZAR in September. TriOptima and LCH.Clearnet offered the first multilateral compression for cleared trades in 2009 and since then multiple cycles have been completed in CHF, EUR, GBP, JPY and USD. Cycles in the new currencies will also be regularly scheduled.

The total eliminated by LCH.Clearnet's SwapClear members in triReduce cycles at the end of August reached $330 trillion, $126 trillion in 2014 alone. TriOptima has eliminated more than $500 trillion in both cleared and uncleared credit, interest rate and commodity swaps since it began offering its triReduce service in 2003.

Daniel Maguire, Global Head of LCH.Clearnet's SwapClear said: "Compression is gaining momentum as the participation in this first triReduce and SwapClear ZAR cycle demonstrates. The industry recognises that it is the right move to help control operational and credit risk and minimise capital costs. Managing systemic risk is equally as important for South Africa as it is for any other jurisdiction, hence our dedication to providing ZAR-denominated IRS clearing and compression solutions to market participants in the region."

"We are committed to working with LCH.Clearnet SwapClear and its members to expand the opportunities for compression in the clearinghouse," said Peter Weibel, CEO of triReduce. "We understand the importance of reducing the size of portfolios both for the clearinghouse members and for the financial system overall."

Currently triReduce offers compression in: 10 cleared and 27 uncleared interest rate swap currencies; cross currency swaps; credit derivatives; and commodity swaps. Inflation swap and FX forward compression cycles will be introduced soon.

*Hungarian forint

**Polish zloty