The London Stock Exchange Group’s (LSEG) Post Trade Solutions has executed its first GBP/USD multilateral compression run at its service for non-cleared OTC derivatives, SwapAgent.
Andrew Williams
The offering was initially launched with EUR/USD currency pairs in 2024, and the move now marks an expansion of multi-asset post-trade capabilities, with the GBP/USD offering accounting for approximately 75% of SwapAgent’s trading activity.
According to the exchange, the offering is set to address market needs by allowing participants to target the majority of cross currency swaps through direct access to a single, authoritative data store – eliminating third party reliance and streamlining the compression process.
Andrew Williams, chief executive of Post Trade Solutions at LSEG, said: “At Post Trade Solutions, we are continually looking for ways to improve the post trade landscape and enhance our services as the market evolves. Adding multilateral compression runs to currency pairs at SwapAgent that are most demanded by our network provides customers with material gross notional reduction while increasing efficiency.”
The new offering is also expected to allow participants to reduce risk and optimise their portfolio by using quarterly compression runs with existing currency pairs, as well as achieve compression across their portfolios through targeting the inter-dealer cross currency market serviced by SwapAgent.
SwapAgent forms part of LSEG’s post-trade division designed to mitigate risk and drive cost efficiencies, and has seen significant developments since the infrastructure was integrated into the exchange, such as sweeping risk into SwapAgent via regular and on-demand counterparty risk optimisation runs.
The success of SwapAgent’s GBP/USD execution follows significant post-trade expansion for LSEG. In November 2022, the exchange was cleared to acquire portfolio optimisation services provider Quantile Group, with the aim of helping derivatives run smoother.
Read more – LSEG expands multi-asset post-trade offering with Acadia acquisition
This was also closely followed by the acquisition of Acadia in December 2022, which provides risk management, margining and collateral services for the uncleared derivatives markets.