Markit’s netting synchronisation service for cleared OTC derivatives goes live


Provider of financial information services Markit Ltd (NASDAQ:MRKT) on Tuesday announced the launch of a service designed to help banks automatically update their risk systems after netting and compression activity at their clearing houses.

The service went live with LCH.Clearnet’s SwapClear and is due to expand to other clearing houses.

Netting exposures within a clearing house enables firms to cut the capital and operational costs associated with OTC derivatives. Thanks to Markit’s service, firms have a single source for the data they need to cancel trades terminated at clearing houses and create new trades to represent residual positions resulting from the netting process. Firms also attain the ability to reconcile all OTC derivatives trades, cleared and uncleared, with the data maintained centrally by Markit’s trade processing service for OTC derivatives, MarkitSERV.

Claire Lobo, managing director and head of business development for MarkitSERV at Markit, said:

“Netting is a critical process for the market but it can create another data management burden and source of operational risk for participants. By synchronising with clearing houses, we update firms in real time about changes to their positions, making it efficient for them to scale their use of netting.”

Cameron Goh, head of Clearing Solutions, SwapClear and Listed Rates Product Management, LCH.Clearnet, said:

“We are delighted to be working with Markit to support post-trade straight through processing for our members. Having our compression instructions available on the MarkitSERV network leverages Markit’s extensive connectivity to the industry and will enable participants to update their systems more efficiently as they increase the use of our compression services.”

You can view the official announcement from Markit by clicking here.

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Markit's netting synchronisation service for cleared OTC derivatives goes live

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