BGC Brokers’ Capitalab Portfolio Compression Service Eliminates EUR 800 Billion Of Swaption Notional In Q4 2015
LONDON, Jan. 5, 2016 /PRNewswire/ — BGC Brokers L.P.’s (“BGC Brokers”) Capitalab, an entity within the BGC Partners, Inc. group (NASDAQ: BGCP) today announced that its Swaptioniser® portfolio compression service successfully eliminated over EUR 800 billion of Swaption notional in Q4 2015. This service brings to the market the latest and most advanced solution for compression and is the first system to provide multilateral portfolio compression for OTC Swaptions. An important milestone as the derivatives industry increasingly adopts portfolio compression practices as a risk mitigation tool; these results are based on the service’s first seven runs of EUR, GBP and JPY Swaption compression and included more than 10 major banks active in the over-the-counter (OTC) Swaptions market
Expanding to other asset classes in the near future, Capitalab is a key addition to BGC Brokers’ offerings, allowing banks and other financial market institutions to make significant savings in capital and initial margin by reducing the outstanding gross notional of derivatives portfolios.
“We are dedicated to providing our clients with state of the art services and technology that help them navigate the complexities of a constantly evolving derivatives marketplace. In a heightened regulatory environment, the ability to compress trades is instrumental in preserving both capital and liquidity and minimising operational risk in the industry. Capitalab’s successful launch of the Swaptioniser solution brings to our clients the benefits of innovative portfolio compression services in a seamless and effective manner, helping our institutional clients reach capital and liquidity provisions outlined in regulatory frameworks such as Basel III,” said Philip Norton, Global Head of e-Commerce, BGC Brokers L.P.
Capitalab’s Swaptioniser is a multilateral portfolio compression service that allows participants to reduce their derivatives exposures whilst maintaining neutral portfolio risk. The solution is highly customisable and accommodates the large number of constraints and models used by options traders.
“Capitalab has produced a well-conceived compression service, which we have found particularly effective with complex products such as swaptions. It is critical that dealers manage their derivatives exposures as efficiently as possible given the associated capital requirements, and this service has been a welcome development for the industry,” said Luke Kotchie, Managing Director, J.P. Morgan in London.
Swaptioniser, which completed its first compression of transactions in September 2015, will be of interest to any large user of Interest Rate Options.
Capitalab, a new division of BGC Brokers L.P., is led by a team of ex-traders and quants from sell-side institutions, Mr Olivier Alvarez, Mr David Bachelier and Mr Gavin Jackson, who combine together over 30 years’ experience in interest rates options trading and quantitative research. BGC Brokers L.P. is regulated by the UK Financial Conduct Authority and based in London.
About BGC Partners, Inc.
BGC Partners, Inc. is a leading global brokerage company servicing the financial and real estate markets. Products include fixed income securities, interest rate swaps, foreign exchange, equities, equity derivatives, credit derivatives, commercial real estate, commodities, futures, and structured products. BGC Partners also provides a wide range of services, including trade execution, broker-dealer services, clearing, processing, information, and other back-office services to a broad range of financial and non-financial institutions. Through its BGC Trader and BGC Market Data brands, BGC Partners offers financial technology solutions, market data, and analytics related to numerous financial instruments and markets. BGC Partners is the majority-owner of GFI Group Inc. (OTC: GFIG), a leading intermediary and provider of trading technologies and support services to the global OTC and listed markets. Through the Newmark Grubb Knight Frank brand, BGC Partners offers a wide range of commercial real estate services, including leasing and corporate advisory, investment sales and financial services, consulting, project and development management, and property and facilities management. BGC Partners customers include many of the world’s largest banks, broker-dealers, investment banks, trading firms, hedge funds, governments, corporations, property owners, real estate developers, and investment firms. BGC Partner’s common stock trades on the NASDAQ Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC Partners also has an outstanding bond issuance of Senior Notes due June 15, 2042, which trade on the New York Stock Exchange under the symbol (NYSE: BGCA). BGC Partners is led by Chairman and Chief Executive Officer Howard W. Lutnick. For more information, please visit http://www.bgcpartners.com.
BGC, the BGC logo, BGC Partners, BGC Trader, Capitalab, Swaptioniser, Newmark, Grubb & Ellis, Grubb and GFI are trademarks, service marks or registered trademarks/service marks of BGC Partners, Inc. and/or its affiliates. Knight Frank is a service mark of Knight Frank (Nominees) Limited.