MarkitSERV, the electronic trade processing service for over-the counter (OTC) derivative transactions and software group Misys have partnered to launch an end-to-end solution. Aimed at Misys Confirmation Matching Service (CMS) customers, it will deliver foreign exchange (FX) derivative trades to central clearing counterparties (CCPs). MarkitSERV is jointly owned by The Depository Trust & Clearing Corporation (DTCC) and Markit and will no doubt get extra volume from the arrangement.
The new service will integrate the MarkitSERV FX clearing gateway – the single point of access to all FX CCPs used by executing brokers, clearing brokers, trading venues and buy side firms – with the Misys CMS, the post-trade treasury solution used by over 1,000 banks, brokers, fund managers and corporate treasurers. The connectivity between Misys and MarkitSERV is promoted as offering Misys CMS customers the benefit of seamless access to all FX CCPs and other FX market participants. It will bring volume to Markit’s platform.
The partnership will allow Misys CMS customers to use MarkitSERV’s SWIFT interface (and industry-standard SWIFT MT300 messages); MarkitSERV’s connectivity for FX clearing validation and clearing broker acceptance, as appropriate; and its network to transmit trade notifications to designated FX CCPs. As a result, CMS clients will be equipped to centrally clear OTC FX transactions, as required by Dodd-Frank and the post-crash European Market Infrastructure Regulation (EMIR). Other jurisdictions are expected to also make it mandatory to clear FX in this centralised manner, as a centralised post-crash framework for dealing in and, crucially, clearing OTC derivatives emerges.
Commenting on the link-up, Keith Tippell, director and co-head of FX at MarkitSERV, said: “In this fast-changing and uncertain environment, our collaboration with Misys leverages the synergies between our respective services to deliver superior, scalable and high performance access to end-to-end processing of new FX clearing flows to all CMS customers. Combined with our partnership with SWIFT to receive trade messages and deliver cleared status notifications via the SWIFT network, and our FX CCP connectivity, this collaboration reinforces our position at the forefront of regulatory processing efficiency in the FX market.”
Gilmore Bray, director of Misys’ global managed services, was equally happy, saying: “Our partnership with the leading clearing gateway, MarkitSERV, is a significant enhancement to the Misys Confirmation Matching Service as it enables our clients to view through a single window the end-to-end status of FX trades requiring central clearing. Misys CMS will utilise the SWIFT network to deliver trades to MarkitSERV on behalf of our clients, eliminating any infrastructure investment or on-going development cost to comply with the regulatory requirements. Misys CMS is dedicated to stay one step ahead of market changes so that our customers are well positioned in advance of regulatory changes.”
The MarkitSERV FX clearing solution legally confirm and route OTC FX transactions to FX CCPs and provide full support for client clearing, allocation of block trades and regulatory reporting. MarkitSERV has live connectivity with the key European markets via the London clearing house (LCH) as was, plus the Asian markets via the Singapore Exchange (SGX) and America via the CME Group, so it can process FX clearing instructions quickly. MarkitSERV adds it will continue to connect to any other CCPs that offer FX clearing as the new regulations come in and markets develop. The organisation says it has processed 99.9% of all FX trades which have been centrally cleared so far.
MarkitSERV and Misys have also partnered to deliver solutions for other non-FX asset classes. These include the integration of MarkitSERV and MarkitSERV Trade Manager solution with the Misys Sophis and Summit platforms, in order to automate rates and credit clearing for buy-side clients.