Capitalab announces execution of its first swaption margin optimisation trades leveraging LCH SwapAgent

Maria Nikolova

As part of Capitalab’s Rates Initial Margin Optimisation service, swaption notional was created between Nomura and Deutsche Bank.

Capitalab, a division of BGC Brokers LP, an entity within international brokerage and fintech company BGC Partners (NASDAQ:BGCP), today announces the execution and subsequent compression of Capitalab’s first swaption margin optimisation trades leveraging LCH SwapAgent, a service for the non-cleared derivatives market.

As part of Capitalab’s Rates Initial Margin Optimisation service, swaption notional was created between Nomura and Deutsche Bank and processed by LCH SwapAgent. The package comprised over a thousand bilateral swaptions and cleared swaps and was successfully compressed in Capitalab’s subsequent margin optimisation cycle, with full straight-through processing provided via MarkitSERV.

LCH SwapAgent trades are the latest products to be eligible for Capitalab’s offering for Initial Margin Optimisation. This expansion arrives with the news of Capitalab’s largest month ever for its interest rate margin optimisation service, with over US$5 billion of IM savings for its global banking clients.

Nathan Ondyak, Global Head of LCH SwapAgent, commented:

“We’re delighted to be part of this initiative to further enhance efficiency for the derivatives market. The integration of LCH SwapAgent with these established market infrastructures enables a broader range of market participants to benefit both from the operational and risk management efficiencies of LCH SwapAgent’s centralised registration and settlement of bilateral trades. Connecting with Capitalab and MarkitSERV also allows those trades to be included in broad portfolio optimisation and compression cycles, driving down notional outstanding and increasing efficiency for all.”

Chris Jackson, Managing Director, IHS Markit said,

“As the market for non-cleared derivatives continues to evolve, there is a growing need for margin optimisation; workflows can greatly contribute to a reduced cost of trading. The MarkitSERV team is proud to collaborate with Capitalab and SwapAgent in enabling greater value to firms across the trading lifecycle.”

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