Osttra Trials Ahead of Canadian Reference Rate Switch

Osttra says it has run a series of trials to prepare market participants for the impending reference rate switch in Canada from the local equivalent of Libor to a new Canadian Overnight Repo Rate Average (Corra) on 28 June.

The trials saw the post-trade service provider process 200,000 messages in collaboration with clearinghouses LCH and CME and 40 customers. As part of the trial, Osttra says its TriReduce service achieved “a major feat” by compressing CAD trades by over 70%, surpassing its previous records.

The firm says that multilateral compression opportunities across portfolios are at the core of its strategy, empowering firms to mitigate risk and manage escalating balance sheet costs amidst growing resource constraints. The service spans a range of derivative products, including interest rate swaps, cross-currency swaps, credit default swaps, FX forwards, and commodity swaps. It adds this comes at a crucial time when regulations are driving market participants worldwide to streamline their gross notional exposure through multilateral portfolio compression.

“As market participants continue to gear up for the end of CDOR, multilateral compression not only mitigates risk but also addresses growing resource constraints, aligning perfectly with the industry’s need for efficiency amid growing cost pressures,” says Erik Petri, head of optimisation at Osttra. “Our seamless integration with major central counterparties and infrastructure providers globally ensures that our clients can effortlessly participate in compression cycles with counterparts across the world.”