Hong Kong Exchanges and Clearing Limited (HKEX) and Calypso Technology Inc. (Calypso), a leading provider of capital markets software received the award for Best OTC Clearing and Risk Management System Implementation at The Asian Banker Financial Markets Technology Implementation of the Year Awards 2017. HKEX and Calypso received the award for the successful, timely delivery of a software solution allowing OTC Clearing Hong Kong Limited (OTC Clear), a subsidiary of HKEX to become the first global clearing house to offer a clearing service for cross-currency swaps in US dollar – Off-shore Renminbi (USD/CNH) market.
"The implementation was critical to OTC Clear's strategic plan to offer a broad range of services to meet the needs of Hong Kong's OTC derivatives market," said Calvin Tai, Joint Chief Operating Officer of HKEX and Chief Executive of OTC Clear. "We continue to build on our position as a leader in Renminbi as HKEX moves into fixed income and currency and becomes a true multi-asset platform that connects Chinese investors with international products and international investors with Chinese products."
OTC Clear's cross-currency IRS service has had strong growth since its inception in August 2016. The exchanges of principal for cross-currency swap transactions cleared by OTC Clear are settled via the Payment versus Payment service of the Real Time Gross Settlement system operated by the Hong Kong Monetary Authority. OTC Clear, which has developed the OTC Clearing and Settlement System, or OCASS, runs its entire operations on Calypso, to process trade registrations, valuations, trade event management, collateral and margin calculations.
"This was a landmark project for both Calypso and our client," said Philippe Carrel, Chief Alliance Officer, Calypso Technology. "Being highly strategic and innovative in nature, it required the highest standards in project governance to deliver a fully integrated solution on time, and obviously within budget, while keeping project risks under control. This was achieved through a deep, sincere spirit of partnership with our client HKEX, which has further strengthened our long term relationships", Carrel added.
OTC Clear is a recognised clearing house under section 37 of Hong Kong's Securities and Futures Ordinance. It is also recognised as a third country central counterparty by the European Securities and Markets Authority, which allows clearing houses located outside the European Union to offer clearing services to certain European financial institutions. In addition, OTC Clear has also obtained an order of exemption from registration as a Derivatives Clearing Organization (Exempted DCO status) from the US Commodity Futures Trading Commission that allows it to admit US banks as clearing members and is recognised as a prescribed facility under the regime for mandatory central clearing of OTC derivatives in Australia.
OTC Clear currently offers clearing services for interest rate swaps (IRS) denominated in Renminbi, Hong Kong Dollars, US Dollars and Euros, non-deliverable IRS denominated in offshore Renminbi (also known as seven-day repo swaps), Thai Baht, Malaysian Ringgit, Taiwan Dollars, Korean Won and the Indian Rupee, cross currency swaps of US Dollar versus offshore Renminbi and non-deliverable currency forwards, or NDFs, referencing Renminbi, Taiwan Dollars, Korean Won and the Indian Rupee.
Calypso Technology, Inc. is a cloud-enabled provider of cross-asset front-to-back solutions for financial markets. Its award-winning software improves reliability, adaptability, and scalability across several verticals, including capital markets, investment management, central banking, clearing, treasury & liquidity, and collateral. Calypso Technology was awarded Technology Provider of the Year 2017 by Central Banking and Technology Provider of the Year 2016 by Asia Risk.
The Asian Banker is the region's most authoritative provider of strategic business intelligence to the financial services community. The Singapore-based company has offices in Singapore, Malaysia, Manila, Hong Kong, Beijing, and Dubai, as well as representatives in London, New York, and San Francisco. It has a business model that revolves around three core business lines: publications, research services and forums.