Reducing the footprint of your derivatives portfolio.

The Challenges

Trading derivatives can be a juggling act at times.

While delivering healthy returns, you also need to balance obligations such as capital requirements and the cost of funding, especially in the context of new and evolving regulation.

Quantile is here to help reduce the footprint of your derivatives portfolio. By combining our decades of experience with market leading technology we can optimise your portfolio to make it cleaner and leaner – recycling your balance sheet, boosting your trading capacity and helping the industry reach a healthy steady state.

Releasing capital

We believe regulation is here to drive positive change in the industry, not to hold it back. That’s why we work closely with our clients to ensure regulatory measures are managed efficiently by reducing risk and the size and complexity of derivatives portfolios.

Capital requirements vary across regimes and geographies, but are frequently driven by:

  • G-SIB
  • Basel III Risk Weighted Assets
  • Basel III Leverage

To thrive in this regulated landscape, participants often face a choice between curbing their business, raising more capital or improving their capital efficiency.

One of the most effective ways to improve capital efficiency is through portfolio compression. By adopting a multilateral compression solution, you can avoid time-consuming bilateral processes and access a deeper liquidity pool that will deliver maximum efficiency – releasing capital while cleaning your portfolio.

Quantile enables clients to keep pace with the evolving landscape and goes beyond simple gross notional reduction to help them meet the demands of future challenges, such as the implementation of SA-CCR and the transition from LIBOR to risk free rates.

Reducing funding 

We know the consumption of critical financial resources can have an adverse effect on the returns, pricing and liquidity of your derivatives book.

One of the main causes of resource-consuming pain is the initial margin (IM) regime, due to its cost of funding. With regulation increasing the number of counterparties involved and the amount of collateral posted, it’s essential that you proactively optimise your portfolio to avoid higher costs and minimise the funding drag.

At Quantile, we help our clients meet the challenges of IM by analysing their book and proposing a set of new market risk neutral trades that deliver cost reductions without changing risk positions. Lower margin costs also contribute to increased market liquidity – so together we can accelerate a more efficient financial system that’s better for all.

The Services

Faster. Cleaner. Leaner.

Interest Rate Compression

Rebalance. Rebuild. Return.

Counterparty Risk Optimisation

Ready? Steady State.

Contact us today to discover how our compression and optimisation services can help reduce your funding and release your capital.