Markit has acquired syndicated loan technology from JPMorgan in a bid to ease third party connectivity issues for market participants and shorten loan settlement timeframes. Financial terms were not disclosed.
Markit says it will make the middleware available to sellside and buyside institutions seeking to integrate with major systems used in the syndicated loan market, including agent servicing platforms and Markit’s trade settlement services.
It currently takes up to 20 days to close out a loan deal, a process which has led to criticism from market regulators concerned about the temporal risks presented by mismatched deals.
Markit made its first foray into the loans market in 2008, with the acquisition of FCS, a unit of JPMorgan Chase that provides portfolio and risk management software to syndicated loan market participants. This was followed in 2010 by the buyout of the technology assets of Storm Networks, in an effort to improve trade settlement workflow and connectivity with counterparties.
Scott Kostyra, managing director and head of Loan Settlement in Markit’s Processing division, says of the current transaction: “Acquiring this software allows Markit to provide the global syndicated loan market with a proven solution for integrating with the newest technology for straight through processing of loan transactions and lifecycle events. We are offering an alternative to expensive and risky internal software builds and helping expedite industry adoption of risk and cost reducing initiatives such as Markit Clear for trade settlement and FpML for electronic communication of loan information.”
Customer deployments of the software are expected to begin in the second half of 2016, he says.