Following the Brazilian exchanges decision to overhaul its entire clearing infrastructure, BM&FBOVESPA has selected Calypso Technology to register and manage its OTC derivatives operations.
It was previously announced that BM&FBOVESPA would implement Cinnobers TRADExpress RealTime Clearing, its multi-asset clearing system, for clearing of equities, derivatives, government bonds and spot FX.
The latest mandate utilizes Calypso technology for registration, pricing, risk assessment and lifecycle management of OTC derivatives and cash products.
In Brazil, OTC trades are required to be officially registered so that the national securities regulator and financial system have full transparency into overall derivatives exposure on a market-wide basis and the ability to track the intraday mark-to-market value of each OTC trade, Calypso says.
With the Calypso platform, BM&FBOVESPA intends to modernize, enhance and expand its OTC operations registration service, offering quality and agility to its customers, and complete analysis instruments for self-regulation and regulatory activities, says Marcelo Maziero, chief products and customers officer of BM&FBOVESPA.
BM&FBOVESPA and Calypso Technology will conclude implementation of Phase One of the platform in 2012, which will allow for the registration of contracts from banks with their non-financial customers as counterparties. The implementation of Phase Two for registration of contracts from the other counterparties and OTC derivatives clearing is expected to be completed in the first quarter of 2013. Phase Three will provide collateral management services for bilateral risk mitigation.
“We are extremely excited to count BM&FBOVESPA as a customer, says Charles Marston, chairman and CEO of Calypso Technology. Calypso Technology is deeply committed to the Latin American market and we look forward to working with BM&FBOVESPA to develop the future market structure for OTC derivatives and other products in Brazil.
(CG)