Compression & Optimisation Update – H2 2023

In 2023, our commitment to innovation continued to drive positive transformation in derivatives markets. Our solutions are empowering market participants by simplifying workflows, reducing bank capital requirements, optimising counterparty exposure management, and facilitating a seamless transition from LIBOR.



  • Asia Risk Counterparty Risk Solution of the Year
  • Asia Risk XVA Solution of the Year
  • FX Markets e-FX Award for Best Compression and Optimisation Service for FX



Q4 2023 LCH market share statistics

compression and optimisation lch market share

Based on observable APA data for multilateral compression, we are maintaining our market-leading position and are on track to exceed 2022 gross notional compression levels.

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In 2023 OSTTRA triReduce has continued to break compression volume records in multiple currencies and CCPs.

Record South African Rand

Increased participation led to a record LCH South African Rand (ZAR) compression run, 170% larger than the previous record. Clients achieved maximum portfolio efficiencies as we successfully compressed ZAR 35.8 trillion notional, 65% of eligible trades, with our trade refactoring technology unlocking additional compression opportunities.

Record Swedish Krona

We ran the largest SEK run since 2018 at LCH, with SEK 4.2 trillion compressed and 55% of eligible trades fully terminated.

Record Czech Koruna

We completed a record CZK run at LCH with CZK 17.2 trillion notional compressed and 61% of eligible trades fully terminated. Clients achieved increased efficiencies from optimising their swaps portfolios through:

  • Our network and participation growing by over 45%
  • Trade refactoring to unlock additional compression opportunities

Record Israeli New Shekel

The final run for bilateral compression was an all-time record as the market moves to cleared ILS. USD Equivalent 21 billion was compressed and 78% of all eligible trades were terminated.

Record Brazilian Real

USD Equivalent 1 billion in notional was compressed in our record BRL run at CME; over 50% larger than the previous record. 91% of eligible trades were fully terminated and BRL compression continues to grow, reaching a 5-year high as clients achieve new efficiencies from optimising their swaps portfolios.

Record Polish Zloty

We completed a compression run of PLN 3.2 trillion at LCH, 1.8 times greater than the previous record.

Record Cleared Canadian Dollars

As participants focus on reducing exposure to CDOR ahead of the transition to CORRA in June 2024, we completed the largest ever ticket reduction of cleared Canadian Dollar trades, with 48% of submitted tickets fully terminated – nearly CAD$1.7 trillion notional compressed. Additional CAD compression runs are available to all clearing participants.

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Interest Rate Benchmark Cessation Playbook

In preparation for benchmark cessations across CAD, MXN and ZAR, we’ve pulled together the key lessons learned from previous index cessations:

  • Step 1: Compression – the cornerstone of any benchmark transition plan
  • Step 2: Conversion – risk optimised conversion of legacy benchmark trades
  • Step 3: Non-Cleared – address the remaining non-cleared population subject to fallbacks
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Reaping the margin and capital rewards of a counterparty risk mitigation service: A buy and sell side perspective

Our panel of industry experts discuss the key challenges faced within margin and capital optimisation including:

  • The use of new services to optimise margin
  • Utilising margin optimisation to gain a reduction in funding and capital costs
  • The key considerations for a buy side firm approaching the requirement to exchange IM
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Rates optimisation

H2 2023 saw a series of record-breaking rates optimisation runs, with growth accelerating each month.

compression rates im optimisation 2023 growth chart

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Firms seek optimisation gains as UMR and SA-CCR bite

With the transition to a new capital regime on counterparty risk and uncleared margin rules largely complete, many market participants have been compelled to closely monitor their exposure to each counterparty to minimise the amount of initial margin they might need to post.

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Capital and funding optimisation – how it works

Our easy-to-use solution enables you to address the key issues that drive the cost of maintaining a portfolio – simultaneously across all asset classes:

  • Capital costs (SA-CCR, RWA, IMM)
  • Funding costs (SIMM, CCP IM across multiple clearing houses)
  • Gross exposure (G-SIB)

Capital Risk video

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ICE Clear Europe Credit Clearing Closure – final volumes migrated

We successfully managed and closed out CDS exposures at ICE Clear Europe.

Key highlights:

  • Nine rebalancing runs completed
  • Over $330 billion of open interest transitioned to alternative CCPs
  • Open interest for over 99% of single names and 77% of indices closed out
  • Equating to 85% overall of the open interest
  • Assisted the industry in gaining regulatory exemptions which enabled us to include the index DTO/MAT series, which accounted for approximately 35% of the index OI
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Opposing Enron effect on energy trading puts credit under the spotlight

The Enron collapse 22 years ago sent shockwaves across segments of the global financial industry, leaving its counterparties exposed to significant credit risk. In February this year, the exposures of EU entities to energy derivatives markets totalled around €1.1 trillion with natural gas & power derivatives representing 60% of the gross notional amounts (Source: ESMA paper on EU Energy Derivatives Markets: Structure and Risks).

Is it time European energy markets shifted from a bi-lateral to a cleared world?

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Margin and collateral solutions

Our complete margin management service offers pre-trade margin and post-trade collateral optimisation powered by OSTTRA triCalculate and triResolve Margin.

Talk to a member of the team to see how we can help.

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