LONDON, Jan. 17, 2018 /PRNewswire/ -- Capitalab, a
division of BGC Brokers L.P. ("BGC Brokers"), an entity within BGC
Partners, Inc. (NASDAQ: BGCP) today announced that its Initial
Margin Optimisation ("IMO") service has completed its largest G4
Interest Rates IMO to date.
More than 15 counterparties have participated in the IMO,
thereby multilaterally shrinking delta, vega and curvature
bilateral counterparty risks and significantly reducing both
non-cleared Initial Margin (IM) and cleared IM at the Central
Clearing Counterparty (CCP).
Capitalab now incorporates compression as part of the margin
optimisation cycle, compressing trades executed in the previous IMO
cycle prior to executing new ones. This is designed to help avoid a
build-up of participants' notional exposure and crowded options
exercise profiles.
"Capitalab's solution optimises clients' IM exposure, provides
considerable savings on funding and helps manage the removal
of previous IMO cycle trades created before their expiry, in order
to reduce counterparty expiry management," said
David Bachelier, Singapore-based co-founder of
Capitalab.
Capitalab's IMO service allows participants to reduce bilateral
initial margin following the enforcement of new Uncleared Margin
Rules, in place since September
2016.
"This IMO cycle highlights the snowball effect of an efficient
IM reduction tool. We delivered an order of magnitude more savings
and combined seamless execution of bilateral swaptions and cleared
interest rate swaps with straight through processing of new trades
and legacy trade compression, thereby providing a simple and
efficient IMO service," said Gavin
Jackson, Capitalab's London-based co-founder.
"We appreciate Capitalab's innovative solution for reducing
non-cleared Initial Margin funding costs in the Interest Rates
space across multiple currencies and risk factors, as well as the
combined compression solution for eliminating any associated expiry
risk management burden," said Chloe Cadene, Global Head of Markets
Financial Resources Management, HSBC.
"The planned timing of compression and a new cycle represent
another big step forward as this avoids the funding spikes - the
enhancement in the execution will allow more optimisation as banks
have so far held back on how many trades to include in a cycle,"
said an XVA trader from a leading Global investment bank.
"We are excited following the execution of Capitalab's joint IM
Optimisation and Compression solution, realising a significant
saving in the cost of Initial Margin funding whilst addressing the
operational complications surrounding expiry management. We welcome
the strong market uptake of the service and look forward to future
cycles," said a senior stakeholder at a leading European investment
bank.
About Capitalab
Capitalab, a division of BGC Brokers
L.P., provides compression services that are designed to bring
greater capital and operational efficiency to the global
derivatives market. It assists clients in managing the
growing cost of holding derivatives, while helping them to
meet their regulatory mandates. Through the Swaptioniser® service
for portfolio compression of Interest Rate Swaptions, Interest Rate
Swaps, Caps and Floors and FX Options, Capitalab looks to simplify
the complexities of managing large quantities of derivatives to
promote sustainable growth and lower systemic risk and to improve
resiliency in the industry. The Capitalab brand is part of FENICS's
fully electronic family of brands. BGC Brokers L.P. is
authorised and regulated by the UK Financial Conduct Authority and
is based in London.
About BGC Partners, Inc.
BGC Partners is a leading
global brokerage company servicing the financial and real estate
markets. BGC offers Real Estate Services through its publicly
traded subsidiary Newmark Group, Inc. BGC owns GFI Group Inc., a
leading intermediary and provider of trading technologies and
support services to the global OTC and listed markets. BGC's
Financial Services offerings include fixed income securities,
interest rate swaps, foreign exchange, equities, equity
derivatives, credit derivatives, commodities, futures, and
structured products. BGC provides a wide range of services,
including trade execution, broker-dealer services, clearing, trade
compression, post trade, information, and other services to a broad
range of financial and non-financial institutions. Through brands
including FENICS, BGC Trader, Capitalab, Lucera, and FENICS Market
Data, BGC offers financial technology solutions, market data, and
analytics related to numerous financial instruments and
markets.
BGC's 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's common stock trades on the NASDAQ
Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC
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. You can also follow the Company
at https://twitter.com/bgcpartners and/or
https://www.linkedin.com/company/bgc-partners.
Real Estate Services are offered through its publicly traded
subsidiary Newmark Group, Inc. ("Newmark"). Newmark's common stock
trades on the NASDAQ Global Select Market under the ticker symbol
(NASDAQ: NMRK).
BGC, BGC Trader, GFI, FENICS, FENICS.COM, Capitalab,
Swaptioniser, ColleX, Newmark, Grubb & Ellis, ARA, Computerized
Facility Integration, Landauer, Lucera, Excess Space, Excess Space
Retail Services, Inc., Berkeley Point and Grubb are
trademarks/service marks, and/or registered trademarks/service
marks of BGC Partners, Inc. and/or its affiliates. Knight Frank is
a service mark of Knight Frank (Nominees) Limited.
Discussion of Forward-Looking Statements about BGC
Partners
Statements in this document regarding BGC that are not historical
facts are "forward-looking statements" that involve risks and
uncertainties, which could cause actual results to differ from
those contained in the forward-looking statements. Except as
required by law, BGC undertakes no obligation to update any
forward-looking statements. For a discussion of additional risks
and uncertainties, which could cause actual results to differ from
those contained in the forward-looking statements, see BGC's
Securities and Exchange Commission filings, including, but not
limited to, the risk factors set forth in BGC's most recent Form
10-K and any updates to such risk factors contained in subsequent
Forms 10-Q or Forms 8-K.
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