TriOptima sees record FX forwards compression in 2019

The record compression activity is up 71% from last year, with triReduce CLS FX compressing $4.9 trillion in the fourth quarter alone.

CME Group’s post-trade derivatives services provider TriOptima has said clients eliminated a record $9.1 trillion of gross notional value from their FX forward portfolios during 2019.

The record compression value in 2019 is up 71% from the previous year, and in the fourth quarter alone, TriOptima said the service compressed $4.9 trillion, up a significant 153% from the previous record quarter of activity in 2018. 

“As FX forwards volumes continue to grow, and in response to capital rule changes and increased regulatory interest in FX compression, clients have a greater need for flexible risk mitigation services to achieve capital and operational efficiencies,” said Guy Rowcliffe, global head of optimisation services and TriOptima at CME Group. “We are pleased with this new milestone for FX forwards compression and look forward to extending our service offering in 2020.”

The triReduce CLS FX provides optimisation and risk mitigation by combining TriOptima’s triReduce service with FX settlement specialist CLS’s market connectivity and infrastructure. More than 20 banks are now using the triReduce CLS FX compression service.

“Citi remains committed to working closely with its clients to drive capital efficiencies by maximising notional compression opportunities across the industry,” Chris Perkins, global head of FX prime brokerage and OTC clearing at Citi, commented. “Our business model greatly benefits from the notional we have eliminated through the triReduce CLS FX service.”