TriOptima to use Markit's Red database

TriOptima, a Swedish technology firm specialising in tear-ups of unwanted over-the-counter swaps from counterparties’ portfolios, has teamed up with Markit to use its reference entity database (Red).

Red is a common platform used by buyers and sellers of credit default swaps that standardises and matches the reference obligations and entities of referenced bonds in credit derivatives transactions. This reduces the basis risk encountered during trade confirmations.

Stockholm-based TriOptima, which only introduced its triReduce credit service in November, hopes that incorporating Red will reduce the time and effort required to identify the trades to be cancelled.

“Markit has set the standard for the industry with its reference entity database,” said Henrik Nilsson, head of business development at TriOptima. “Our mutual subscribers will now benefit from increased efficiency by mapping to the Red data seamlessly within the triReduce website.”

TriOptima's multilateral tear-up service was first introduced for interest rate swaps in April 2003, and most recently executed the first oil swap cancellation cycle in January. It aims to reduce gross positions in a portfolio while maintaining the same net risk position, thus reducing operational risk, operational cost and counterparty credit exposures.