Markit Group – the supplier of mark-to-market pricing, asset valuations, dividend forecasting and index services – says MarketAxess, the electronic trading platform for US and European corporate and emerging markets bonds, has subscribed to the Markit RED service to support their client-to-dealer electronic trading platform for credit derivative indices. MarketAxess expects to launch its platform in September.
“RED is the market standard identification system for the credit indices and we wanted this to be the identifier on our electronic trading platform,” says Barry Goldenberg, Credit Derivatives Product Manager at MarketAxess. “Our approach from the start has been to focus on partnering with other market leaders like Markit RED to bring superior technology solutions to our clients and foster greater efficiency for the market.”
Markit RED is the self-proclaimed “industry standard” for reference entity and reference obligation identifiers in the credit markets. It covers the requirements of the single name trading environment and has also developed a standard methodology for identifying and numbering the major iTraxx and Dow Jones CDX credit indices which have enhanced the liquidity of the credit derivative market since their launch.
MarketAxess will use the RED data to facilitate execution on the standard index contracts and will provide a feed of the information directly into The Depository Trust & Clearing Corporation’s Deriv/SERV Trade Affirmation and Matching Service. The expectation is that this will provide straight-through-processing from execution to confirmation whilst managing operational risk.
Peter Axilrod, Managing Director of New Business Development at DTCC says the implementation of the MarketAxess electronic trading platform for the credit indices is made easier by the use of RED. “RED has been part of the DTCC Deriv/SERV since inception and matching on RED identifiers for all credit derivatives greatly enhances the value of our service,” he says.
Penny Davenport, Director of Markit RED says “there is a lot of focus on improving the operational environment in the fast-growing credit markets and RED heightens the value added by the MarketAxess / DTCC integration.”
Markit, founded in 2001, has designed, launched and acquired over 20 financial data services which are now used by over 300 institutions globally. Areas of product expertise and service include an independent valuation perspective on OTC derivatives (credit, equity, FX, rates, energy, power, metals and structured products), corporate bonds, syndicated loans, dividend forecasting and index and ETF management.
MarketAxess is an electronic platform through which institutional investors can access broker-dealers. They can request competitive, executable bids or offers from multiple broker-dealers, and then execute trades with the broker-dealer of their choice. It offers high-grade US and European corporate bonds, agencies and emerging markets bonds. MarketAxess also provides data and analytical tools to help market participants make trading decisions, and facilitates the trading process by electronically communicating order information between trading counterparties. MarketAxess’s current participating dealers are ABN AMRO, Banc of America Securities, Barclays PLC, Bear Stearns, BNP Paribas, Citigroup Global Markets, Credit Suisse First Boston, Deutsche Bank Securities, DZ Bank, FTN Financial, Goldman Sachs, HSBC, ING Financial Markets, JP Morgan, Jefferies & Company, Lehman Brothers, Merrill Lynch, Morgan Stanley, The Royal Bank of Scotland, Santander Investment Securities, SG Corporate & Investment Banking, UBS and Wachovia Securities.