Tokyo Stock Exchange and Japan Securities Clearing Corporation Select Calypso for CDS Clearing Service

• Calypso to manage clearing lifecycle for CDS
• Partnership brings improved transparency to OTC markets

Tokyo, October 25, 2010 — Calypso Technology, Inc., a global application software provider of an integrated trading, risk and processing platform to financial institutions and corporate treasuries, announced today that Tokyo Stock Exchange Group (TSE), Asia’s largest exchange, has selected Calypso Technology to provide the platform for its new credit default swap (CDS) clearing service to be provided by Japan Securities Clearing Corporation (JSCC). Clearing CDS on the iTraxx Japan Index, the Calypso product will manage the lifecycle of the new clearing service for OTC CDS, as the TSE and JSCC address the market need for central counterparty clearing in Japan.

Responding to the financial crisis and the resulting global demand for risk reduction, improved transparency and operational efficiencies particularly in the OTC market, TSE and JSCC collaborated to develop a central clearing function for CDS in Japan. “Throughout the crisis, we saw increased demand from our clients for enhanced risk management capabilities and back office processing services such as settlement and payments,” comments Kei Miyazato, Head of IT Business Department, TSE. “Providing central counterparty clearing for CDS and CDS index in Japan is a much required service. Our vision is to provide a proficient, advanced market standard solution that would achieve the goal of reducing counterparty risk. In addition to Calypso Technology’s experience in successfully implementing central clearing services at other global exchanges, the firm’s market perspective and their industry know-how are important to our program.”

Leveraging the Calypso product’s configurable workflow and out-of-the-box functionality to achieve straight-through-processing, TSE will use the system throughout the full lifecycle of OTC CDS clearing: limits checking, trade matching, confirmation, messaging, margining, netting and settlement. “Calypso Technology’s ability to provide a flexible, purpose-built solution to clearing houses, while fully integrating with trade and confirmation platforms across multiple product lines, has made Japanese CDS central clearing service a reality,” comments Akio Yamashita, Head of Operation Planning, JSCC

TSE and JSCC also identified several key aspects of the Calypso platform which would deliver added value to the central clearing service. The Calypso platform offers interfaces with external trade infrastructure systems such as Mark-IT and DTCC. Furthermore, the firm can leverage the system’s award-winning back-office and comprehensive functionality, including historical VaR, cash positions, reporting, Credit Event Processing and Trade Lifecycle Processing.

Charles Marston, Chairman & CEO, Calypso Technology, comments, “This joint work between a respected and instrumental exchange and forward-looking securities clearing organization further emphasizes our applied expertise in OTC derivatives central clearing and the significant in-roads we have made in APAC. Through our work with TSE and other global exchanges, we continue to facilitate central clearing services to financial markets around the world. We are delighted to be selected by TSE and look forward to working with them as this historical landmark project progresses.”

About Tokyo Stock Exchange Group (TSE)
Established in 1949, the Tokyo Stock Exchange, Inc. is the largest stock exchange in Asia and the second largest in the world by aggregate market capitalization of its listed companies.

The Tokyo Stock Exchange Group, Inc is comprised of several subsidiaries including Tokyo Stock Exchange, Inc., Japan Securities Clearing Corporation (JSCC) and Tosho System Service Co., Ltd(TSS), TSE IT subsidiary.

About Japan Securities Clearing Corporation (JSCC)
Japan Securities Clearing Corporation (JSCC) was established in July 2002 as the first cross-market clearing organization in the Japanese securities market by Tokyo Stock Exchange, Osaka Securities Exchange, Nagoya Stock Exchange, Sapporo Securities Exchange, Fukuoka Stock Exchange and Japan Securities Dealers Association. In January 2003, JSCC was licensed as the first clearing organization in Japan to conduct the Securities Obligation Assumption business (now called Financial Instruments Obligation Assumption business) under the Securities and Exchange Law (now called Financial Instruments and Exchange Law).

JSCC unified clearing functions provided by each market until 2003 and realized improvement in the service level for customers with robust and efficient operation. From the inception, JSCC has been putting utmost priority on our risk management system to ensure safety in clearing and settlement process for domestic and global investment communities.

As it is now, Japan Securities Clearing Corporation (JSCC) provides the clearing services for all cash transactions executed at any of the domestic stock exchanges and three PTSs (proprietary trading system) in Japan, as well as futures and options transactions executed at the Tokyo Stock Exchange, Inc.