According to Risk Magazine, âMarkitâs portfolio reconciliation service makes an important contribution to reducing risk in the OTC derivatives markets. For this reason, it is Riskâs Industry Platform of the Year.â
Markitâs Portfolio Reconciliation service, which is part of the Markit Trade Processing (MTP) platform, enables portfolio managers to reconcile positions with their counterparties electronically, across all OTC derivative asset classes. The service extracts information automatically from counterparty collateral statements which typically come in a wide variety of formats. It then checks the extracted information against the userâs portfolio details and flags discrepancies.
Markit launched the Portfolio Reconciliation service in September 2006 in response to the increasing use of collateral in the OTC derivative markets, leading to an onerous portfolio reconciliation process. Markitâs service automates the process and reduces errors which can result in disagreements between counterparties over collateral and margin calls.
Jeff Gooch, Executive Vice President and Head of Trade Processing and Valuations at Markit, said: âWe are extremely pleased that Risk has recognised our contribution in the OTC derivative trade processing arena. Our Portfolio Reconciliation service provides portfolio managers with the ability to reconcile their positions quickly and accurately, which reduces operational risk and provides clients with a clear understanding of their true exposure.â
MTP Portfolio Reconciliation is integrated with Markitâs affirmation, confirmation and portfolio valuation services. Portfolio managers interviewed by Risk Magazine stressed the importance of an integrated trade processing solution for reducing operational risk.