Research European Commodity Market Regulations - Part 1 | Page 49

European Energy Market Regulations V3.1

About the Sponsor
TriOptima
TriOptima is the award-winning provider of post trade risk management services and infrastructure
for OTC derivatives. Focused on reducing costs, eliminating operational and credit risk, improving
counterparty exposure management, and reducing systemic risk, TriOptima offers a range of
services: triReduce to reduce swap inventory and counterparty risk; triResolve to reconcile OTC
derivative portfolios and manage disputes; triBalance to manage cleared and bilateral counterparty
risk; and triQuantify to measure and analyze counterparty risk. Currently triBalance and triQuantify
are in the piloting phase and are targeted for launch by early 2014.
triReduce, TriOptima’s portfolio compression service, eliminates credit risk and reduces operational
and capital costs. Eliminating derivatives exposures and shrinking the balance sheet is critically
important in anticipation of Basel III gross leverage ratio guidelines. Derivatives are measured on a
gross, not net basis, inflating balance sheets significantly. Moreover, compression eliminates gross
notional value, and with the EUR 3 billion clearing threshold in EMIR, it has become extremely
important for commodity trading companies to proactively manage their gross notional exposure.
Serving over 150 institutions worldwide including major energy houses and dealer banks, triReduce
offers compression cycles in a range of commodity derivatives, interest rate swaps and credit default
swaps. triReduce has terminated $354 trillion in notional principal outstanding across product
classes since its introduction in 2003 through August 2013.
TriOptima has gone from a pilot phase in 2011 to running 6 live cycles in the commodity space in the
past year, including natural gas, power, oil, coal and precious metals. Over 24 commodities houses
and dealer banks have participated with several more completing documentation in preparation of
the upcoming cycles. More than $14 Billion in notional principal has been eliminated for
commodities transactions.
triResolve, TriOptima’s portfolio reconciliation and counterparty exposure management service, is
used by over 450 institutions to reconcile their OTC derivative portfolios, the majority on a daily
basis. With over 8 million transactions on triResolve (90% of collateralized OTC derivative
transactions plus uncollateralized OTC derivatives, cleared trades and other types of trades), most
reconciliations are done daily in order to comply with the new portfolio reconciliation standards that
will be effective under the CFTC (August 23) and ESMA (September 15) rules in 2013.
New institutions are joining triResolve daily around the world, over the past 12 months over 250
new firms have started to use triResolve, an increase of more than 100% over the previous 12
months. The number of reconciliations grew to 116,000 a month in July 2013. Energy firms, Asian
financial institutions and mid-tier European firms are among the growing number using triResolve.
Enhancements to the basic triResolve platform incorporated and standardized data categories
critical to commodity participants. Currently over 450,000 commodity trades are being reconciled on
triResolve. Adoption of the triResolve service accelerated dramatically in the past year in order to
meet the regulatory deadlines for portfolio reconciliation in the US (August 23) and Europe
(September 15). During the past year, triResolve has been adopted by the commodity trading
community as the industry-wide solution for portfolio reconciliation. As of end of August 2013, over
70 leading energy houses and financial institutions use the triResolve service for reconciliation of
commodity trades.

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