ForexClear members have announced that, through the use of the service’s compression solution, they have reduced their notional outstanding by $4.5 billion, global clearing house LCH informed earlier today.
ForexClear has seen demand for its NDF clearing service significantly increase since the introduction of the uncleared margin rules in September 2016.
LeapRate reminds, that ForexClear service processed over $1 trillion in notional over the course of August, setting a new monthly record.
Some of the first participants to actively compress their trades at ForexClear include Standard Chartered Bank and Citi.
The process of compression enables members and their clients to improve capital and operational efficiency by reducing notional outstanding.
Tamaryn Nuttall, Head of ForexClear Product, LCH, said:
Growth in FX clearing volumes has led to demand for solutions that drive down notional outstanding and contribute to greater capital and operational efficiency. Compressing $4.5 billion in cleared NDF notional is a significant milestone for LCH. We expect uptake of compression services to accelerate significantly over the coming year as clearing volumes continue to grow and as we expand our compression offering.
Matt Turner, Director FM Balance Sheet Management, Standard Chartered Bank, commented:
Having seen the benefits of compression in our rates business, we’re delighted to be an early adopter of compression at ForexClear. It’s an effective way to reduce our notional outstanding and improve operational efficiency.