FXPBs see compression tech as key for credit optimisation

FX Markets USA: Providers hope new tech solutions can help replenish credit lines to hedge funds

Trading tech

Foreign exchange prime brokers (FXPBs) are increasingly harnessing technologies to clean up margin-intensive options portfolios and help them reallocate credit to their largest clients.

Compression and novation tools have become an effective way for FXPBs to reduce the notional footprint on their hedge fund clients’ FX options books, in response to the uncleared margin rules (UMR).

Novation, the practice of transferring the contract from one dealer counterparty to another, is commonly used for

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