TriOptima, a post-trade infrastructure provider, has partnered with CME Group to offer its triReduce compression service to CME clearing members, allowing them to reduce the notional value of their interest rate swaps contracts.
From the second half of 2015, banks that are CME clearing members will be able to use triReduce to effectively ‘tear up’ U.S. dollar interest rate swaps contracts with notional values amounting to trillions of dollar by combining other trades with compatible characteristics.
The announcement will be welcomed by banks with large swaps portfolios as a way to reduce their balance sheet in the face of tougher capital rules set out in Basel III.
“We’re pleased to work with TriOptima so that our dealer bank members will have the opportunity to use triReduce compression as they focus on reducing line items and cleared gross notionals to improve leverage ratios under new regulatory standards,” says Sunil Cutinho, president of CME Clearing.
In subsequent months, additional currencies will be added for dealer-cleared swaps based on clearing member interest.
CME Clearing Members Granted Access to TriOptima Compression Service
TriOptima, a post-trade infrastructure provider, has partnered with CME Group to offer its triReduce compression service to CME clearing members, allowing them to reduce the notional value of their interest rate swaps contracts.