Markit launches multi-dealer valuation platform

Source: Markit

Markit, a financial information services company, today announced the launch of the first multi-bank, cross-asset client valuations platform.

The initiative was first announced in February last year.

Markit Valuations Manager provides a secure, standardised view of over-the-counter (OTC) derivative positions and derivative and cash instrument valuations across counterparties on a single electronic platform. Subscribers to Markit's Portfolio Valuations service will be able to view the bank counterparty valuations alongside Markit's independent valuations.

Currently, portfolio managers receive numerous statements from their counterparties in multiple formats, requiring many hours of manual consolidation. A recent survey of 50 asset managers conducted by Markit highlights the urgent need for an electronic, secure valuations process:

  • 17% of respondents said that a single file delivery of counterparty statements would save them between 50 and 1,000 hours of work a month. On average, respondents estimated time savings of more than 49 hours a month.
  • More complete position information and a standard statement format across all counterparties ranked as the most important improvements required, followed by an efficient price challenge mechanism.
  • 66% of respondents said they received their counterparty statements by email, underlining the potential security risk of misplaced or incorrectly forwarded emails.
  • Over 65% of respondents said they were under pressure to conduct more frequent reconciliation with counterparties and provide more frequent NAV computation to investors.

The new platform incorporates a dispute mechanism and workflow tools with full audit trail to enhance the price challenge process. Markit Valuations Manager is integrated with Markit's Trade Processing PortRec service to enable full life cycle support for OTC derivative positions including counterparty position data delivery, normalisation[1][1], reconciliation and valuation.

"We support this Markit-led initiative and expect to realize increasing operationalal gains and cost efficiencies as more firms join the platform. The ability to use Markit Valuations Manager in conjunction with their PortRec service will also be a significant benefit for us," said Peter Barsoom, Deputy COO of BlueMountain Capital Management LLC in New York.

"As an active member of several buy-side working groups in Europe, we welcome the ability to access normalised position and valuation data from the banks in a standardised way. Markit has not only delivered the normalisation, but it is it is consolidating the information in a single electronic portal across banks. I think this is a great step forward for the industry," says Patrick Finn, Head of Operations at BlueCrest Capital Management LLP in London.

David Lefferts, Managing Director of Markit Valuations Manager, said: "Financial market participants and their regulators are acutely aware of the need for reliable, independent counterparty position and valuation information for OTC derivatives and cash securities. We are pleased to be launching Markit Valuations Manager after twelve months of research and development, working closely with buy-side and sell-side players. We look forward to bringing considerable efficiencies to our clients' valuation processes."

Markit is launching the platform with six banks - Bank of America Merrill Lynch, Citi, Credit Suisse, Goldman Sachs, J.P. Morgan and UBS - and expects to add additional participating banks over the coming months.

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