Best Company: Markit
WITH THE FINANCIAL industry facing unprecedented regulatory and cost pressures, Markit in 2013 launched products and services designed to reduce risk, enhance transparency and improve operational efficiency.
Markit’s information business provides indices, pricing data, reference data and analytical tools for a wide range of asset classes and markets. “Our products and services enable our customers to price instruments, value portfolios and manage risk,” said Markit chief financial officer Jeff Gooch. “They also aid compliance with regulatory requirements.”
Markit isn’t a name-brand company the way Goldman Sachs, Bloomberg and BlackRock are, but the company punches well above its weight in terms of its influence on capital markets.
“The financial industry is facing enormous changes, and we are helping them to address these concerns,” said Gooch. “We spent a lot of time in 2013 on the transparency side. We’ve launched an innovative approach to valuing private equity, which is gaining a lot of traction. In the CDS world, we’re allowing electronic platforms like SEFs to use our indices. We’ve been extending our existing businesses, for example by introducing CLO pricing and expanding the U.S. side of our iBoxx bond indices.”
Markit’s new service for the pricing of collateralized loan obligations covers more than 5,000 investment-grade tranches of U.S. and European CLOs. The company said it was launched in response to demand from customers for a high-quality, independent data source for CLO pricing.
The service is an expansion of Markit’s evaluated pricing business for securitized products, which include residential mortgage-backed securities, commercial mortgage-backed securities and consumer asset-backed securities, as well as corporate, sovereign and municipal bonds.
In its processing business, Markit has responded to customer demands for documentation solutions in the face of waves of new regulation such as Fatca, Emir, Dodd-Frank, and Basel III. “There’s an enormous amount of documentation due to regulatory requirements,” said Gooch. “Firms are literally processing the same documents.”
Markit’s Counterparty Manager service provides a hosted document-management system used to streamline account onboarding. It also provides the technology backbone for Dodd-Frank-, Emir-, and Fatca-related compliance; Markit said 75 broker-dealers and 700 buy-side firms are users.
Also in 2013, Genpact and Markit launched a centralized service for end-to-end management of client onboarding and other ‘know-your-customer’ requirements in financial markets. Both companies have provided client onboarding and KYC services to the financial industry for years, and their expertise and purpose-built technologies will unite in the new service.
“The service is expected to enable the industry to streamline operations, reduce costs and enhance compliance through better data management and quality,” said Gooch. “This service will provide an improved experience for buy-side firms, reducing multiple demands for documents and information, as well as an industry-wide golden copy of client reference data.”
Markit launched Credit Centre, a pre-trade credit-checking system for OTC derivatives. “Credit Centre provides clearing certainty for trades executed in electronic marketplaces, including swap execution facilities,” Gooch said.
Credit Centre provides buy-side firms, regional banks and other institutions that access clearing through futures commission merchants with a consolidated view of available credit. It also helps institutions deploy credit lines across multiple clearing venues.
Markit’s electronic trade processing service for OTC derivatives, MarkitSERV, provides market participants and execution venues with a single point of access to 15 clearinghouses worldwide. In Asia, MarkitSERV connects more than 2,600 customers to the derivatives clearing services run by the Australian Securities Exchange, Japan Securities Clearing Corporation, and the Singapore Exchange.
In October 2013, Markit launched Collaboration Services, an open messaging network designed to enable people in all parts of the global financial services industry to communicate and share information seamlessly. Markit Collaboration Services allows users to see availability, send instant messages, use video and chat rooms, and exchange documents across disparate messaging platforms.
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