IHS Markit Launches OTC Derivatives Valuation Data for FX

IHS Markit announced this Monday that its over-the-counter (OTC) derivatives valuation data is now available to financial institutions for best execution compliance. The time-stamped data will assist firms in monitoring intraday and historic transaction costs across foreign exchange (forex) and other OTC derivatives.

As global regulations clamp down on transparency regarding financial market transactions, the London-based firm has launched this offering, to help meet the need for standardized valuation procedures and reporting documentation for complex trades in OTC markets.

According to the statement, this valuation data will be available for a range of markets - interest rate, equity, Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term, credit, commodity, and structured product OTC derivatives.

Commenting on the launch, Laura Misher, managing director of derivatives data and valuation services at IHS Markit said: “Financial institutions need to validate and contextualize the effectiveness, quality and timeliness of each transaction."

"In terms of compliance, OTC trades are the most difficult to manage due to their complexity and the availability of quality market data. As a leading source of market data on OTC derivatives with significant breadth of inputs, we are uniquely positioned to help firms address these challenges by providing transparent valuations and inputs that can be used for transaction cost analysis.”

IHS Markit Data Provides OTC Trade Slippage Calculations

To provide this data to financial institutions, the company is leveraging its Portfolio Valuations data and methodology. This allows it to calculate OTC trade slippage, which firms can use to confirm execution quality and generate reports on trading effectiveness.

“As the regulatory frameworks have expanded from equities to bonds and OTC assets, the requirements for data and Analytics Analytics Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision making. In the trading space, analytics are applied in a predictive manner in an attempt to more accurately forecast the price. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analyt Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision making. In the trading space, analytics are applied in a predictive manner in an attempt to more accurately forecast the price. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analyt Read this Term have also become increasingly complex,” noted Michael Richter, executive director of trading analytics at IHS Markit.

“With this in mind, we are committed to enabling firms to reduce the cost and burden of compliance through our comprehensive suite of best execution solutions,” he added.