Levels of compression activity have increased significantly since the start of 2014, motivated by a combination of new regulations and enhancements to clearing technology.
The major Clearing Houses operate ‘risk free’ compression services to help firms reduce the number of open positions and reduce gross notional. ClearCompress does not try to replicate this but augments existing market solutions by capturing and compressing the remaining trade population; those with small date mismatches that do not get compressed and continue to attract significant capital charges.
Using innovative bi-lateral compression to remove trades across mismatched cash flow dates, ClearCompress reduces gross notional across the portfolio and shrinks the size of the remaining trade population. Light touch, configurable and independent, ClearCompress can be tailored to enable compression for clients according to their timescale, frequency and portfolio scope delivering clear and quantifiable benefits at a reasonable cost.