In an exciting collaboration, TriOptima and CLS pioneered the triReduce CLS Forward FX Compression service to provide risk mitigation services for the global FX market for non-cleared OTC derivative trades. The service combines CLS’s infrastructure and market connectivity with our compression expertise.
triReduce FX is a great tool for firms to gain regulatory and economic capital benefits while reducing direct costs to the business without changing their market risk positions.
The service is available to all CLS members, including prime brokers and dealers, and covers both G10 and emerging market currencies. In response to market demand we enhanced the service to combine both compression with the ability to add new offsetting trades, opening up the service to wider participation. Now prime brokers and dealers can achieve significant risk reduction and manage their leverage ratios effectively.
In addition to the triReduce CLS service, our clients can also take advantage of triReduce compression for NDFs (non-deliverable forwards) which we offer on a regular basis.
Improves the CRD4 element of the Leverage Ratio calculation under Basel III, which requires PFE add-ons for FX forward products. (1% for trades < 1 year, 5% for trades 1-5 years, and 7.5% for trades > than 5 years, per page 15 of the Basel III leverage ratio framework and disclosure requirements).
Assists firms that meet the ESMA volume thresholds to comply with the business conduct compression requirements. triReduce FX offers a platform for multiple institutions to compress regularly, thus efficiently fulfilling the ESMA requirements for many counterparties at the same time.
Enables firms to manage their gross notional exposures and redistribute counterparty exposure in order to achieve regulatory and economic capital benefits and reduce direct costs to the business.