On Oct 18th, 2010, the CME Group launched its OTC interest-rate swaps clearing solution. The Calypso Platform is one of the components of the CME Groupâs new offering that allows members to clear OTC derivatives trades. CME Group has also implemented the Calypso systemâs limits functionality, which enables the clearing members to control and manage intra-day risk.
Michael OâConnell, Managing Director CME Clearing Solutions, comments, âWe looked at a number of third-party solutions in the market, seeking out a partner that had deep expertise in the OTC derivatives markets. It was essential that the provider was one who could demonstrate an understanding of what we wanted to accomplish and a vision of how to realize our goals. Calypsoâs support of our interest rate swap clearing solution enables us to continue to bring safety and soundness to the market.â
âGiven the current regulatory initiatives designed to improve financial stability, we are going to see a fundamental shift in the OTC derivatives market toward the clearing of standardized OTC derivatives on exchanges. The establishment of CME Clearingâs new offering is an integral part of this evolution,â comments Charles Marston, CEO of Calypso Technology. âOur work with CME Group is a testament to our central role in this new era of OTC derivatives trading.â
Calypso Technology has also launched a solution for clearing member firms that facilitates automated trade connectivity with the clearinghouse, workflow management, reconciliation of a memberâs positions with the clearinghouse, OTC derivatives valuation, as well as credit risk and collateral management to enhance straight-through-processing. It enables member firms to offer differentiated services to their clients. The Calypso system also replicates clearinghouse margin calculation methodology and performs what-if testing to evaluate the impact of margin on a trade prior to physical clearing.