Onboarding of buy-side clients and futures commission merchants (FCMs) is underway for MarkitSERV Credit Centre, a pre-trade credit checking solution for OTC derivatives, which provides clearing certainty for trades executed in electronic marketplaces, including swap execution facilities.
MarkitSERV says the solution will help firms meet regulatory requirements, including Dodd-Frank, by providing buy-side firms, regional banks and other institutions that access clearing through FCMs with a consolidated view of the credit available to them from their FCMs. It also helps institutions determine how they deploy their credit lines among multiple clearing venues, MarkitSERV says.
FCMs may update credit lines during the trading day as client portfolios change, and electronic execution venues will ping Credit Centre to confirm the availability of credit at the time a trader wishes to post a price or execute an order, MarkitSERV explains. That can reduce the risk of a trade failing due to a firm exceeding its credit limit. The service can also be used for checking and managing credit lines required for off-facility voice and block trades.
Cinnobers TRADExpress is the ultra-low-latency system underlying the platform.
As a trusted provider of financial market infrastructure, MarkitSERV is highly-qualified to offer clearing certainty through our Credit Centre, says Jeffrey Maron, managing director at MarkitSERV. Dodd-Frank requirements give rise to a series of challenges for the industry around electronic trading and central clearing. The need for trade certainty is top of the list. Our ultra-low-latency service will allow participants to transact with confidence.
MarkitSERV Credit Centre will initially cover OTC credit, foreign exchange and rates and will expand to other instruments, including equity derivatives, futures and options and to managing credit for non-cleared trades.
(CG)