OTC Trade Clearing Increases via MarkitSERV Following CFTC Mandate

MarkitSERV, a trade processing service for over-the-counter derivatives, has submitted over 600,000 trades to clearinghouses since March 11 through the end of July. The period’s start coincides with when the Commodity Futures Trading Commission (CFTC) made the clearing of certain OTC derivatives mandatory.

Compared to the first half of 2012, the volume of trades submitted for clearing using MarkitSERV was up 48% during the same period in 2013. Of these 600,000 trades, approximately 280 firms combined to submit over 120,000 transactions where at least one party was not a member of a clearinghouse.

In addition to causing an increase in trades submitted for clearing, the CFTC’s requirements also caused more than 300 buy-side firms to become new subscribers of MarkitSERV.

“The CFTC’s Category 2 deadline affected a large number of firms and the industry has accomplished a lot in a short time,” said Henry Hunter, managing director and head of product management for MarkitSERV. “Firms need a seamless trade management process for the front-, middle- and back-office, so they can meet obligations to clear trades moments after they execute. MarkitSERV gives customers a practical cross-asset class solution that helps them process, clear and report OTC derivative transactions.”