Capitalab enhances its FX optimisation service with sophisticated RWA and SA-CCR focus

Rhea-AI Summary

On June 8, 2021, Capitalab, part of BGC Brokers LP and BGC Partners (NASDAQ: BGCP), announced enhancements to its FX optimisation service. The service focuses on Risk Weighted Asset (RWA) calculations utilizing FX trade data from CLS, aiming to optimize client capital before and after adopting the SA-CCR framework. Capitalab's technology has led to notable efficiency improvements, with over $50bn in gross notional eliminated per participant, achieving up to 55% reduction in targeted metrics. This service strengthens partnerships within the FX marketplace.

Positive

• Successful execution of third optimisation cycle with over $50bn gross notional eliminated per participant.
• Efficiency improvements of 50%+ and reductions of 30-40% on targeted metrics.
• Enhanced capabilities in RWA IMM exposures and SA-CCR add-ons, optimizing capital for clients.

Negative

• None.

LONDON, June 8, 2021 /PRNewswire/ -- Capitalab, a division of BGC Brokers LP, an entity within the BGC Partners, Inc. (NASDAQ: BGCP) group of companies, announced today enhancements to its Capitalab FX, with CLS optimisation service, which utilises FX trade data provided by CLS. The service focuses on Risk Weighted Asset (RWA) under the Internal Models Method (IMM) and Standardised Approach for Counterparty Credit Risk (SA-CCR) calculations, bringing new ways to optimise capital for clients before and after SA-CCR adoption.

Capitalab's innovative new offering is powered by proprietary technology, where participants target various metrics in a unified optimisation cycle combining compression and risk-balancing technologies.

David Bachelier, Capitalab's Singapore-based co-founder, said, "Additional metrics available to optimise include RWA IMM exposures and SA-CCR add-ons, allowing clients to be at the forefront of preparations for the game-changing SA-CCR regulatory framework, while optimising their current and future capital requirements."

Gavin Jackson, Capitalab's London-based co-founder, added, "Capitalab successfully executed the third live optimisation cycle of its Capitalab FX, with CLS service, with an enhanced focus on RWA IMM and SA-CCR. Our second cycle was roughly six times larger than the pilot run, and this third cycle saw a further 50%+ efficiency improvement, with approximately $50bn gross notional eliminated per participant, and improvements typically between 30-40% on participants' individually targeted metrics, in a unified cycle, with some achieving more than $80bn notional compression and 55% reduction in their targeted metrics. Connectivity to CLS helped to achieve a light-touch run from an operational perspective, and we look forward to building on this collaboration within the FX marketplace."

Adrian Hudd, Global Head of G10 FX Swap Trading at BNP Paribas, said, "We are pleased to further strengthen our partnership with Capitalab participating in their newly established multi-lateral FX swap compression service. Capital requirements for FX are a principal focus of the industry so the light-touch bespoke compression framework delivered by Capitalab will certainly bring additional efficiencies to the marketplace."

About Capitalab

Capitalab, a division of BGC Brokers LP, 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, Equity options, FX and FX Options, as well as Initial Margin Optimisation service and fully automated trade processing, 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 the Fenics fully electronic family of brands. BGC Brokers LP is authorised and regulated by the UK Financial Conduct Authority and is based in London. BGC Brokers LP is a subsidiary of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage and financial technology company.

About BGC Partners, Inc.

BGC Partners, Inc. ("BGC") is a leading global brokerage and financial technology company. BGC specializes in the brokerage of a broad range of products, including Fixed Income (Rates and Credit), Foreign Exchange, Equities, Energy and Commodities, Shipping, Insurance, and Futures. BGC also provides a wide variety of services, including trade execution, brokerage, clearing, trade compression, post-trade, information, and other back-office 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, BGC Trader, GFI, Fenics, Fenics Market Data, Capitalab, Lucera, Corant Global, Corant, and Piiq are trademarks/service marks and/or registered trademarks/service marks of BGC and/or its affiliates.

BGC's customers include many of the world's largest banks, broker-dealers, investment banks, trading firms, hedge funds, governments, corporations, and investment firms. BGC's Class A common stock trades on the NASDAQ Global Select Market under the ticker symbol "BGCP". BGC is led by Chairman of the Board and Chief Executive Officer Howard W. Lutnick. For more information, please visit http://www.bgcpartners.com. You can also follow BGC at https://twitter.com/bgcpartners, https://www.linkedin.com/company/bgc-partners and/or http://ir.bgcpartners.com/Investors/default.aspx.

Discussion of Forward-Looking Statements about BGC

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. These include statements about the effects of the COVID-19 pandemic on the Company's business, results, financial position, liquidity and outlook, which may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected. 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 and Special Note on Forward-Looking Information set forth in these filings and any updates to such risk factors and Special Note on Forward-Looking Information contained in subsequent reports on Form 10-K, Form 10-Q or Form 8-K.

About CLS

Trusted by thousands of counterparties within the global FX ecosystem, CLS makes FX safer, smoother and more cost effective. Trillions of dollars' worth of currency flows through our systems each day.

Created by the market for the market, our unrivaled global settlement infrastructure reduces systemic risk and provides standardization for participants in many of the world's most actively traded currencies.

Our complementary products are designed to enable you to manage your risk most effectively across the full FX lifecycle – whether through more efficient processing tools or market intelligence derived from the largest single source of FX executed data available to the market. For more information visit cls-group.com.

Disclaimer:

This communication is directed at CLS members who have professional experience in matters relating to investments. Any investment or investment activity to which this communication relates is available only to such CLS members or will be engaged in only with such CLS members. Persons who do not have professional experience in matters relating to investments should not rely on this communication.

Media contact at BGC Partners, Inc.:
Harjeet Singh
+44 20 7894 8829

Investor contact at BGC Partners, Inc.:
Jason Chryssicas
+1 212 610 2426

 

View original content to download multimedia:http://www.prnewswire.com/news-releases/capitalab-enhances-its-fx-optimisation-service-with-sophisticated-rwa-and-sa-ccr-focus-301307723.html

SOURCE BGC Partners, Inc.

FAQ

What is the latest enhancement announced by BGC Partners (BGCP) on June 8, 2021?

BGC Partners announced enhancements to its Capitalab FX optimisation service, focusing on RWA and SA-CCR calculations.

How does Capitalab's FX optimisation service improve capital efficiency?

It utilizes proprietary technology to optimize metrics through a compression and risk-balancing cycle.

What kind of efficiency improvements did Capitalab achieve with its new FX service?

Participants experienced over 50% efficiency improvements, with some achieving up to 55% reductions in targeted metrics.

What is the significance of the SA-CCR framework for BGC Partners (BGCP)?

The SA-CCR framework represents a regulatory shift that Capitalab helps clients prepare for by optimizing capital requirements.