CME Group is using the Calypso System to support its clearing service for over the counter interest rate swaps, launched on October 18.

The system is built by Calypso Technology, the San Francisco-based provider of an integrated trading, risk and processing platform for financial institutions and corporate treasuries.

Michael O’Connell, managing director of CME Clearing, said in a statement: “We looked at a number of third party solutions in the market, seeking out a partner that had deep expertise in the OTC derivatives markets.” CME has also implemented the Calypso System’s limits functionality, which allows clearing members to control and manage intraday risk.

Calypso Technology has also launched a solution for clearing member firms that facilitates automated trade connectivity with the clearing house, workflow management, reconciliation of a member’s positions with the clearing house, OTC derivatives valuation, and 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 clearing house margin calculation methodology and performs what-if testing to evaluate the impact of margin on a trade before physical clearing.