IHS Markit Adds CME Clearing to Derivatives Service
BUSINESS WIRE –London – IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, today announced it has added CME Clearing to its netting synchronization service from MarkitSERV, the trade processing platform for OTC derivatives. The service provides a single source of electronic messages from multiple clearinghouses to help banks and asset managers update risk management systems when trades are netted or compressed at the clearinghouse.
Claire Lobo, managing director and head of business development for MarkitSERV at IHS Markit, said: “Netting introduces a new set of post trade events to the OTC derivatives market and the need for banks and asset managers to consume netting data from multiple clearinghouses illustrates the value of MarkitSERV’s central hub and global network. The workflow and integrations we offer automatically synchronize bank risk systems when position data change due to netting, novation, termination or other event in the derivatives lifecycle.”
Clearinghouses net exposures to help firms reduce the capital and operational costs associated with OTC derivatives. For CME, the service initially supports netting of cleared interest rate swaps, basis swaps, forward rate agreements, overnight index swaps and swaptions.
Sunil Cutinho, President of CME Clearing, said: “MarkitSERV synchronization is an important solution for our clients because it enables straight-through processing of post trade services like netting, coupon blending, and compression. This also paves the way to deliver further efficiencies and innovations as we scale out swaption clearing and develop listed invoice spread trading.”
In addition to automating trade booking, firms can also reconcile all OTC derivatives trades, cleared and uncleared, with their counterparties and clearinghouses with the data maintained centrally by MarkitSERV. MarkitSERV can also send regulatory reports to update trade repositories on behalf of customers.
MarkitSERV introduced netting synchronization with LCH in November 2015. More than 20 firms are actively using the functionality.
About IHS Markit (www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.
New investors are LVC and IHS Markit.
Transactions from services like compression should be exempt from clearing obligation.
Clearing of FX options is due in the coming months.
The service has compressed over $6 trillion notional to date.
GCSA Capital helped the clearinghouse develop its performance bond.