MARKIT, DTCC LAUNCH MARKITSERV OTC DERIVATIVES PLATFORM

Posted September 2, 2009

LONDON and NEW YORK -- Markit and The Depository Trust & Clearing Corporation (DTCC) have launched MarkitSERV, a new company that combines the two organizations’ electronic trade confirmation and workflow platforms to provide a single gateway for over-the-counter (OTC) derivative trade processing.

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 [see news update, August 11, 2009] includes the Markit and DTCC flagship trade processing services for affirmation, confirmation, novation, allocation and reconciliation.

“In the current economic climate, having a robust derivative processing capability has become more essential than ever before for buy-side institutions,” says Ric Okun, Executive Vice President of PIMCO. “At PIMCO, we are very excited about the enhanced workflow platform being offered by MarkitSERV and see it as an integral solution to meet the increasing demands of our business.”

The initiative was first announced in July 2008, 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 is now live, providing market participants with a single electronic gateway for trade processing across asset classes,” says Jeff Gooch, Chief Executive Officer of MarkitSERV. “We look forward to working with the buy-side and sell-side to help them reduce operational risk and adopt clearing in the OTC derivative markets, in line with their commitments to global regulators.”

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 transformational 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 organizations, we will be able to further extend benefits to a wider user base and across a more diverse range of financial instruments.”