How triReduce works
take the first step to smaller trade portfolios
A triReduce cycle has four simple steps, with an additional dress rehearsal
added depending on the cycle type.
Step 1: Preparation
Before participating in a compression cycle, an institution must complete the relevant legal documentation and automate the trade extraction and trade termination process.
Step 2: Sign up
Firms indicate cycle participation to their industry peers by signing up on the triReduce website.
Step 3: Linking
Each participant submits a portfolio of trades versus the other participants in the cycle, and those trades are matched to determine the trades eligible for compression. Match results are displayed real time on the triReduce website for each participant, and mismatches can be researched and corrected interactively.
Step 4: Live execution
In some cases, there will be a dress rehearsal before the final step of live execution; however the procedures are the same for both the dress rehearsal and live execution.
Each participant sets the parameters for controlling movements in market and credit risk, and submits its portfolio of trades with fresh mark-to-market values. TriOptima calculates a multilateral “Unwind Proposal” and publishes it on the triReduce website. The proposal is risk neutral within the tolerances set by all participants. Each participant verifies the proposal and indicates acceptance. Once all participants have accepted the Unwind Proposal, the transactions are legally terminated.
Interest Rate Trade Reporting Repository
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