ForexClear Members Reduce Notional Outstanding by $4.5B

, a global clearing house, announced this Tuesday that members of its ForexClear service, by using its compression service, have managed to reduce their notional outstanding by $4.5 billion.
On a financial instrument, the notional amount (or notional value) is the nominal or face amount that is used to calculate payments made on that instrument. The notional outstanding amount is the monetary value of the open interest, ie., the notional value of all contracts that are outstanding at a given time.

Compression allows ForexClear members to improve capital
LCH’s ForexClear allows investors to clear and physically delivered FX Options and their hedges. By using the compression solution, clearing members and their clients are able to get rid of offsetting trades, which reduces the notional outstanding and the number of line items in a portfolio.
Specifically, the on ForexClear allows its members and their clients to improve capital and operational efficiency by reducing notional outstanding. According to the statement released today, Citi and are some of the first to actively compress their trades at ForexClear.

Tamaryn Nuttall
Source: LinkedIn
Commenting on the announcement, 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.”
The compression offering on LCH’s ForexClear includes both standard and blended rate solo compression, the statement said.
Matt Turner
Source: LinkedIn
“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,” added Matt Turner, Director FM Balance Sheet Management, Standard Chartered Bank.

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