DTCC AND MARKIT To Form Strategic OTC Derivatives Partnership

Markit and The Depository Trust & Clearing Corporation (DTCC) has formed a new company that will combine the strengths of Markit's front- and middle-office trade processing services with DTCC Deriv/SERV's back-office leadership in post-trade confirmation and matching services. In response to customer demand for a more secure, reliable and streamlined operational environment, the new company will provide a single gateway for confirming over-the-counter (OTC) derivative transactions globally. This will allow buy-side and sell-side OTC derivative market participants to confirm trades and to gain access to additional services provided by Markit and DTCC through a common portal.

The new company will comprise Markit's recently acquired MarkitWire platform (formerly SwapsWire) as well its other trade processing services such as Markit Trade Manager, Markit Tie Out, and Markit Port Rec. DTCC will contribute its Deriv/SERV matching and confirmation engine, and its AffirmXpress, MCA Xpress and Novation Consent services. Additional services that will not become part of the new company include Markit's data and valuation services and DTCC's downstream Trade Information Warehouse, centralised settlement and payment netting services. This initiative should accelerate the adoption of electronic processing solutions across the growing, $454 trillion, OTC derivative market where approximately 50% of transactions are still confirmed on paper. "Both DTCC and Markit have been instrumental in the OTC derivative community's efforts to strengthen the operational infrastructure of this dynamic market," said Eraj Shirvani, Chairman of the International Swaps & Derivatives Association (ISDA) and managing director and co-head of European Credit at Credit Suisse, in a press release. "This alliance is a groundbreaking combination that reaches across borders and asset classes to provide a service that will help a wide range of market participants achieve greater certainty in their transaction processing," he added.