MarkitServ, the most widely used electronic trade processing service for OTC derivative transactions, today announced an agreement with Swift, the financial messaging provider for more than 10,000 financial institutions and corporations worldwide, to deliver trades - initially foreign exchange (FX) non-deliverable forward (NDF) transactions - from Swift to multiple FX central clearing counterparties (CCPs), via the innovative MarkitServ FX clearing gateway.
Under the terms of the agreement, NDF trade messages sent over SWIFT will be automatically routed onwards to the designated FX CCP for clearing. When parties elect to clear an FX trade, MarkitSERV will automatically receive transaction data from SWIFT, match the trade, send it to the clearing broker for acceptance, and then deliver accepted trades to the designated CCP. Once the trade is cleared, a notification will be sent from MarkitSERV to the originating party via the SWIFT network.
MarkitSERV's FX clearing gateway provides a single point of access for executing brokers, clearing brokers, trading venues and buy-side firms to match, legally confirm and route OTC FX transactions to nominated CCPs. The service, which includes full support for client clearing and allocations, is live with LCH.Clearnet and Singapore Exchange (SGX) and certified by CME. MarkitSERV has, to date, processed every NDF trade that has been cleared. MarkitSERV will continue to build connectivity to other CCPs worldwide as they begin to clear FX.
Jason Vitale, Global Head of FX Prime Brokerage & FX OTC Clearing at Deutsche Bank, said: "Deutsche Bank has partnered with MarkitSERV for both its inter-dealer and client clearing requirements. This much welcomed initiative fulfils the FX industry's need to accommodate ongoing regulatory obligations while helping our clients evolve their businesses. MarkitSERV's focus on enabling clients to utilize existing messaging channels to painlessly gain access to the new FX clearing market structure will benefit all market participants."
Paul Walker, a Managing Director in Goldman Sachs Securities Services, said: "We welcome this initiative as an important milestone on the path towards clearing. It will provide the market a solution that allows clients to avoid the resource burden and challenge of developing their own processing solutions to manage the complexity of new FX clearing flows."
Andres Choussy, Global Head offy, Global Head of FX Clearing at J.P. Morgan, said: "MarkitSERV's continuing innovation in post trade STP, and in particular its commitment to providing clients with an easy mechanism to access FX CCPs - current and emergent - will greatly facilitate the transition to meet new clearing obligations mandated by Dodd-Frank and associated regulations in Europe and Asia."
Michael Irwin, Global Co-Head of FX Prime Brokerage at Morgan Stanley, said: "Morgan Stanley is connected to the MarkitSERV service today and we welcome the news about MarkitSERV's latest initiative with SWIFT. This service will provide flexibility for clients to connect in an efficient manner which will further help minimize the impact on clients from evolving regulatory changes."
Stephen Ramsden, Global Head of FX Prime Brokerage and CCP Clearing at RBS, said: "We are delighted to support the collaboration between MarkitSERV FX and SWIFT. It makes absolute sense to bring together existing distribution channels to effectively manage new clearing workflows. This initiative provides an extremely efficient solution for clients to help them navigate successfully through an evolving regulatory landscape and keeps the integration simple and effective."
Edward Pla, Global Head of FX Prime Brokerage and Clearing at UBS, said: "MarkitSERV brings a great deal of cross-product and buy-side client expertise in post-trade derivatives processing. It is therefore well positioned to help the FX industry successfully address the challenges and opportunities associated with new regulatory requirements related to the central clearing of FX derivatives."
Keith Tippell, Co-Head of FX at MarkitSERV, said: "This single piece of connectivity from MarkitSERV will bring all SWIFT users into new FX clearing flows. With all G14 banks signed to MarkitSERV's FX clearing solution and connectivity to CCPs in place, our focus now is to ensure that regional banks and the buy-side benefit from the most efficient access to the evolving FX clearing environment."
Joe Halberstadt, Head of FX and Derivatives at SWIFT, added: "We are delighted to be collaborating with MarkitSERV to enhance functionality and provide additional value to SWIFT users. Straight-through processing of NDF messages from the SWIFT network via the MarkitSERV FX clearing gateway will eliminate a great deal of the time and effort that might otherwise be required by participants to build connections to CCPs and clearing brokers."
MarkitSERV's trade processing services for FX include connectivity to central clearing venues and an array of trade capture, post-trade messaging and workflow tools. In September 2011, MarkitSERV acquired Logicscope and its TradeSTP trade processing technology. TradeSTP's extensive post trade connectivity to more than 70 liquidity providers (banks, brokers, exchanges and electronic crossing networks) and 400 financial institutions (banks, hedge funds, asset managers and corporates) is now fully integrated within the MarkitSERV platform.
Beyond FX, MarkitSERV is already a primary conduit to CCPs. MarkitSERV has been certified by, or has established links to, LCH.Clearnet, CME, SGX and IDCG for direct submission of interest rate derivative transactions for clearing and to CME, ICE Clear Credit, ICE Clear Europe and Eurex for credit derivatives. MarkitSERV is actively engaged with over a dozen other CCPs worldwide and will continue to establish connectivity to others as they launch.