MarkitSERV, jointly owned by The Depository Trust & Clearing Corporation (DTCC)and Markit, provides a single gateway for OTC derivatives trade processing. By integrating electronic allocation, trade confirmation and portfolio reconciliation, MarkitSERV provides an end-to-end solution for post-trade transaction management of credit, interest rate, equity and foreign exchange derivatives. MarkitSERV also connects dealers and buy-side institutions to central clearing counterparties and trade repositories. In 2011, more than 20 million OTC derivative transactions were confirmed using MarkitSERV.
MarkitSERV, has agreed Heads of Terms with four leading FX interdealer brokers (IDBs) to provide voice trade affirmation, regulatory reporting and clearing services for FX transactions. With a single connection into the award-winning MarkitSERV FX trade processing platform, BGC Partners, GFI Group, Tradition and Tullett Prebon would be the first four interdealer brokerage firms to benefit from fully-integrated voice affirmation, clearing and regulatory reporting workflows.
This market-leading initiative is designed to assist IDBs to transition effectively to a regulated FX trading environment, including requirements to execute trades using Swap Execution Facilities (SEFs). By providing seamless access to all FX clearinghouses, clearing brokers and futures clearing merchants, as well as global and regional trade repositories, MarkitSERV offers IDBs and other entities that may become SEFs a single system for complying with regulations applied to FX trading.
The solution presented by MarkitSERV is a significant development for both IDBs and their clients, who, in turn, would benefit from receiving real-time electronic notices of execution with unique swap identifiers (USI), voice affirmation and cleared and reported status updates through a single MarkitSERV connection.
Development of MarkitSERV’s enhanced voice affirmation solution is guided by working groups of market participants and this collaborative approach will add significant value to all parties with respect to product direction.
Mike Lawrence, CAO FX Options & CEEMEA Trading, CitiFX, said: “We look forward to benefiting from MarkitSERV’s enhanced voice trade affirmation platform that addresses some of the industry’s previously unsolved challenges in the clearing and reporting workflows. The platform paves the way for future developments to increase trader productivity whilst continuing to reduce operational risk.”
Keith Tippell, co-head of FX at MarkitSERV, said: “We are very excited to be working with market leading brokers to help them to navigate successfully through the enormous data management and workflow challenges arising – now and in the future – from regulatory change. Our innovative solution will address broad-based industry concerns about the impact of change, for example the generation and distribution of USIs, and will address the connectivity challenges all market participants face.”
MarkitSERV’s award-winning FX solutions encompass a comprehensive set of trade capture, post-trade messaging and reporting and clearing workflow tools that support all participants in the FX transaction lifecycle.
In September 2011, MarkitSERV acquired Logicscope and its TradeSTP connectivity hub, which provides real-time delivery of trade notifications for more than 70 liquidity providers (banks, brokers, exchanges and electronic crossing networks) and 400 financial institutions (banks, hedge funds, asset managers and corporates). In April 2012, MarkitSERV announced a partnership with SWIFT to capture and deliver FX trade messages from the SWIFT network for onward delivery to FX CCPs, reinforcing its commitment to provide the industry with maximum flexibility and choice in respect of trade message delivery to the MarkitSERV FX environment.
Outside of FX, MarkitSERV is already central to IDB trade volume in credit default swaps, interest rate derivatives and equity derivatives, with more than 75 brokers worldwide using MarkitSERV.
Clearing houses to which MarkitSERV is connected include CME, Eurex, ICE Clear Credit, ICE Clear Europe, IDCG, LCH.Clearnet (CDSClear, ForexClear and Swapclear), Nasdaq OMX, OCC and SGX. MarkitSERV has signed agreements to route trades to a number of additional clearing houses soon to launch, and will connect to additional ones as they come on line.
In July, by selecting MarkitSERV for its Vendor E-FX Initiative of the Year Award, the judging panel at FX Week noted that MarkitSERV “has had an exceptionally impressive year and put itself right at the centre of one of the most rapidly developing areas of the FX market, namely central clearing. Following the acquisition of Logicscope, its enhanced FX middleware platform tackles head-on the challenges that market participants now face in connecting to multiple CCPs, offering a highly credible alternative to incumbent providers.”