Post-trade network OSTTRA completed a record-breaking compression cycle that eliminated JPY 803 trillion in notional value at the Japanese Securities Clearing Corporation (JSCC). This marks the largest single notional reduction ever recorded for JPY-denominated interest rate swaps.
Japanese market participants face significant capital and margin requirements for derivatives positions as central banks and regulators globally focus on reducing interconnectedness and complexity in derivatives markets. Using OSTTRA’s proprietary trade refactoring and trade revision methodologies, this compression directly addresses those pressures by eliminating redundant exposures without changing actual risk profiles.
These processes enabled market participants to significantly reduce risk exposures, capital requirements and operational burdens, enhancing portfolio efficiency.
Yasuhiko Tamura, executive officer of OTC Derivatives Clearing Services at JSCC, said: “We believe that the implementation of these new methodologies will contribute to reducing the risk exposure and give further capital as well as operational efficiency for swap counterparties.”
Yutaka Imanishi, executive officer, APAC, OSTTRA added: “By combining our leading optimisation technology with deep market participation, we are helping firms unlock significant capital efficiencies while supporting a more resilient and sustainable derivatives ecosystem.”
