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Markit and DTCC launch MarkitServ

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Markit and the Depository Trust & Clearing Corporation have launched MarkitServ, a company that provides a single gateway for over-the-counter derivative trade processing.

Markit and the Depository Trust & Clearing Corporation have launched MarkitServ, a company that provides a single gateway for over-the-counter derivative trade processing.
 
Jointly owned by DTCC and Markit, MarkitServ combines the DTCC Deriv/Serv and Markit Wire trade confirmation platforms to cover all major asset classes including credit, interest rate, equity and commodity derivatives. 

The new company includes the Markit and DTCC flagship trade processing services for affirmation, confirmation, novation, allocation and reconciliation. 
 
The initiative was first announced in July last year, subject to completion of due diligence, regulatory filings and approval by relevant global regulators. Last month, Markit and DTCC announced that due diligence was complete and MarkitServ had received regulatory approval from the UK Financial Services Authority and the US Department of Justice.
 
MarkitServ was created in response to calls from regulators, politicians and market participants for greater cooperation within the industry over electronic trade confirmation to reduce risk in the OTC derivative markets. More than 50 banks, 50 inter-dealer brokers and 1,200 funds are already connected to the service which is expected to handle in excess of 15 million confirmations in its first year.
 
‘We believe the launch of MarkitServ will be tranformational for the financial community that has been looking for more streamlined and automated confirmation of OTC derivative instruments globally,’ says Michael C. Bodson, executive managing director of DTCC business management and strategy, and chairman of MarkitServ. ‘We’ve listened to our customers and by combining the expertise of these two very successful organisations, we be able to further extend benefits to a wider user base and across a more diverse range of financial instruments.’
 
Lance Uggla, chief executive officer of Markit, says: ‘MarkitServ combines the individual strengths of Markit and DTCC’s trade processing services to provide a single electronic platform for the OTC derivative markets. This initiative represents an important milestone at a time of significant change in the financial markets, and will provide the industry with the framework it needs to improve efficiency and reduce risk.’     
 
MarkitServ will rationalise costs by removing the need for users to connect to numerous, asset-class specific trade processing systems. Instead, clients will be able to use their existing connectivity to access a wider variety of combined services. The new company will be industry-governed and will have a global presence, including offices in London, New York and Tokyo.
 
Markit’s data and valuation services, and DTCC’s Trade Information Warehouse, life-cycle event processing and centralised settlement and payment netting services will remain part of the respective parent companies.

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