HKEX Breakthrough: OSTTRA triReduce Executes Landmark First Compression Run

Hong Kong's exchange just rewrote the rulebook on derivatives compression.

OSTTRA's triReduce platform completed its inaugural compression cycle through HKEX's infrastructure—slashing notional exposure while keeping net positions intact. The move signals Asia's accelerating push toward capital efficiency in over-the-counter markets.

Why It Matters

Compression runs eliminate redundant derivative contracts. Less bloat means reduced counterparty risk and freed-up collateral. For institutional traders, it’s like defragging a hard drive—except the hard drive holds billions in notional value.

Behind the Scenes

HKEX didn’t just provide the venue—it integrated triReduce’s compression engine directly into its clearing ecosystem. That’s a big deal. Seamless connectivity, zero manual intervention, and real-time risk recalibration.

Bigger Picture

This isn’t just a tech upgrade—it’s a statement. Hong Kong is positioning itself as the nexus for next-gen institutional crypto and derivatives flow. Efficient, scalable, and regulatorily tidy. Exactly what the market needs when half of traditional finance still thinks blockchain is a bicycle accessory.

One cynical take? It’s almost like they’re preparing for a future where balance sheets actually have to be… efficient. How novel.

OSTTRA, the global post-trade solutions provider, announced that its market-leading portfolio compression service, OSTTRA triReduce, has completed its first compression run for USD/CNH cross currency swaps (CCS) cleared through HKEX’s OTC Clear.

This exercise was conducted with HKEX’s OTC Clear on August 28th with five financial institutions, including Bank of China (Hong Kong) and Crédit Agricole CIB. A total of $5.8bn in notional value was compressed in this pilot run, demonstrating the potential to deliver substantial capital efficiencies and risk reduction to market participants.

The outstanding volume of USD/CNH CCS cleared on HKEX’s OTC Clear – the only CCP clearing this contract – was $255.2bn in July 2025. OSTTRA triReduce compression runs offer market participants a way to efficiently reduce costs and risks associated with this heavily traded contract that is consistently growing in volume.

The collaboration between OSTTRA and HKEX comes amid increasing demand from market participants for compression services in Asia. OSTTRA has seen a significant increase in compression volume in Asia-Pacific (APAC) currencies, with compressed notional value more than doubling in the first six months of 2025 compared to the same period last year. The notional value of APAC currency contracts closed in 2025 to date surpassed $33.1tn, more than twice the amount seen for these currencies across the whole of 2023.

Building on the successful first run, OSTTRA intends to conduct another compression run for the USD/CNH pair with a larger group of market participants in the coming months on HKEX’s OTC Clear.

: “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 efficiencies for banks needing to manage risk in this fast-growing currency pair.”

: “The compression for USD/CNH cross currency swaps further enhances our capital and operational efficiency. We look forward to seeing the benefits of compression runs for this product and the positive impact on the market.”

: “As an active player in HKEX’s OTC Clear, we are pleased that the inaugural cleared USD/CNH CCS – a key client offering of our bank – compression service has been introduced to the local market. Crédit Agricole CIB is a prominent proponent of compression for its cost and risk mitigation benefits, which also aligns with our operational strategy for our market activities franchise.”

Source: OSTTRA