OSTTRA Adds Compression For USD/CNH Swaps At HKEX OTC Clear
OSTTRA, the global post-trade answers provider, has completed its inaugural portfolio compression run for USD/CNH cross currency swaps (CCS) cleared through Hong Kong platforms and Clearing’s (HKEX) OTC Clear. The exercise, conducted on August 28, involved five financial institutions including Bank of China (Hong Kong) and Crédit Agricole CIB. In total, $5.8 billion in notional value was compressed, providing market participants with meaningful cost and risk reduction.
The service was carried out via OSTTRA’s triReduce platform, which specializes in optimizing portfolios by reducing redundant or offsetting trades. For participants in the growing USD/CNH market, the pilot run illustrates how compression can alleviate balance sheet pressures while supporting liquidity. With being the only central counterparty (CCP) clearing this contract, the initiative marks a milestone for risk management in the offshore renminbi (CNH) market.
Given that the outstanding cleared USD/CNH CCS volume at OTC Clear reached $255.2 billion in July 2025, even a single compression cycle has the potential to create material capital efficiencies. The pilot sets the stage for future runs that could involve a broader set of institutions, amplifying systemic benefits for the market.
Takeaway
Rising Demand For Compression In Asia
The USD/CNH compression launch comes amid strong demand for portfolio compression in Asia-Pacific (APAC). OSTTRA reports that compressed notional volumes in APAC currencies more than doubled in the first half of 2025 compared to the identical period last year. By mid-2025, notional closed on APAC currencies had already surpassed $33.1 trillion, exceeding twice the amount compressed across the whole of 2023.
As and international participation deepens, the demand for capital efficiency tools is accelerating. Compression assists banks and dealers manage exposures in high-volume currencies while minimizing capital charges, operational complexity, and counterparty risk. The highlights why market participants have sought this service in particular.
By expanding triReduce to cover USD/CNH CCS, OSTTRA is broadening its footprint in Asia and reinforcing its position as a leading provider of post-trade optimization services. The firm’s presence in clearinghouses across multiple regions underscores its role as an enabler of efficient and resilient post-trade infrastructure worldwide.
Takeaway
Industry Reactions And Next Steps
The pilot compression run has drawn . Erik Petri, Head of Optimisation at OSTTRA, said: “The addition of cleared USD/CNH CCS to our compression service, as well as HKEX’s OTC Clear as a compression venue, further establishes OSTTRA as the leading provider of compression in the Asia Pacific market. As CNH activity increases in the region, this service will provide valuable capital and operational in this quick-growing currency pair.”
Zhang Chengdong of Bank of China (Hong Kong) added: “The compression for USD/CNH cross currency swaps further enhances our capital and operational efficiency. We look forward to viewing the benefits of compression runs for this product and the positive impact on the market.” Similarly, John Luk of Crédit Agricole CIB commented: “As an active player in HKEX’s OTC Clear, we are pleased that the inaugural cleared USD/CNH CCS compression service has been introduced to the local market. Compression aligns with our operational strategy for risk and cost mitigation.”
Following the successful debut, OSTTRA plans another compression run for USD/CNH swaps later this year, with a larger group of financial institutions expected to participate. If adoption expands, the service could materially reduce notional outstanding in this contract and further improve market liquidity and stability.
Takeaway
