Credit data vendor Mark-it Partners has signed an initial 16 financial institutions to its reference entity database service, Project Red.
Mark-it Partners won the mandate to provide the Red service earlier this year from Deutsche Bank, Goldman Sachs and JPMorgan, who jointly founded the database.
The three banks are among the first 16 who have agreed in principle on the subscription terms to use the Red service for a minimum of three years. The other institutions are ABN Amro, Bank of America, Bear Stearns, Citigroup, CSFB, Dresdner Kleinwort Wasserstein, HSBC, Lehman Brothers, Merrill Lynch, Morgan Stanley, Royal Bank of Scotland, TD Securities and UBS.
Lance Uggla, CEO, Mark-it Partners, says one of the major barriers to the growth of the credit default swap market is a fear of errors being made in the documentation: "Simply having a resource of accurate names is a major boon for the industry. Red will allow market participants to download the same names from a single source, avoiding the costly mistakes associated with mismatched trades."
The Red Service is a set of benchmark reference entity names and related reference obligations. It enables dealers to standardise documentation and avoid mistakes associated with misunderstanding the relationship between entities and obligations. Counterparties can now use standard Red codes when confirming transactions - two sets of unique alphanumeric codes have been created by S&P's Cusip Service Bureau. Users can also conduct trade matching on either the DTCC or Swapswire platforms.