LCH.Clearnet says that its SwapClear
service has eliminated over $100 trillion in notional since 1 January 2015,
driven by an acceleration of compression activity by SwapClear’s members and its
clients throughout the year.
SwapClear compressed $323 trillion over the
year, reducing the notional outstanding from almost $362 trillion at the start
to the year to $254 trillion. This was achieved through its proprietary
compression services, such as blended-rate, and those offered in partnership
Members are currently able to compress
interest rate swaps (IRS), forward rate agreements (FRA) and overnight index
swaps (OIS) using the service.
Plans to introduce compression services for
inflation swaps and FX non-deliverable forwards (NDF) remain in place for 2016,
the firm says.
“Eliminating over $100 trillion in net
notional in a calendar year is an important milestone in our efforts to
increase efficiency for the market,” says Cameron Goh, head of clearing
solutions, SwapClear and listed rates, LCH.Clearnet. “With the European mandate
for clearing IRS fast approaching, we’ve seen a marked increase in cleared
volumes at SwapClear.
“As the capital requirements under Basel
III begin to bite, banks and clearing brokers are continually looking at ways
to reduce exposures and drive down their clients’ and their own notional
outstanding,” he adds. “At the same time, buy-side firms are keen to make
operational savings by managing their books as efficiently as possible.
Compression enables our members and their clients to do just that by offsetting
compatible trades, allowing them to achieve significant capital and operational