Trading technology vendor Calypso has launched a new version of its cross-asset processing platform that enables better use of post-trade services for managing OTC derivatives exposures, including more efficient collateral management.
The new platform, Calypso V13, allows clearing members to deploy house and client clearing services for interest rate swaps, credit derivatives and FX products across multiple clearing houses. It also offers initial/variable margin calculations for clearing houses together with integrated collateral management and treasury and liquidity services. The new platform uses curve generation methodology, new integrated cross-asset pricing and market data management capabilities as well as real-time analytical reporting tools to help users better achieve their investment objectives.
The aim is to help customers take advantage of opportunities created by the new OTC market structure in clearing and collateral management services.
As part of new OTC derivatives rules that are due to come into force at the end of this year, many swaps will be standardised so they can be traded on exchange and centrally cleared. This will require firms to meet collateral obligations that were previously not required under bilateral agreements.
According to financial consultancy TABB Group, nearly US$2 trillion in additional collateral may need to be posted to comply with proposed central clearing margin requirements as part of the G20 commitments to reducing systemic risk in OTC derivatives markets.
“Centrally-cleared derivatives will turn the back-office from a cost centre to a critical tool for efficient allocation of capital,” said Adam Sussman, partner and research director at TABB. “Firms realise that a more automated and real-time clearing workflow will allow them to deploy shrinking amounts of capital more intelligently.”