Markit Acquires JPMorgan’s Syndicated Loan Software Technology

The newly acquired software technology is designed to help streamline third party connectivity issues, shortening loan settlement timeframes

Markit (Nasdaq:MRKT), a global provider of financial information services, has acquired JPMorgan’s systems integration software and syndicated loan technology for use across both the buy and sell side, according to a Markit statement.

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In particular, Markit’s newly acquired software technology from JPMorgan is designed to help streamline third party connectivity issues for market participants, thereby shortening loan settlement timeframes. Furthermore, the systems integration will help facilitate straight through processing (STP) of loan transactions.

As a result of the acquisition, Markit will make its newly integrated offering available to both sell side and buy side institutions. Currently, loan deals can take upwards of twenty days to close, a time interval Markit has looked to mitigate. The acquisition of JPMorgan’s software integration is the latest stroke by Markit to help fortify its loan markets offering – this was preceded by the acquisition of FCS, a unit of JPMorgan Chase, in 2008 and technology assets by Storm Networks in 2010.

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Despite the passage of the acquisition, customer developments are not expected to begin before H2 2016 – additionally, the financial terms of the acquisition have not been disclosed at the present, nor are they expected to yield any material impact on its 2016 fiscal year earnings.

According to Scott Kostyra, Managing Director and Head of Loan Settlement in Markit’s Processing division, in a statement on the acquisition: “Acquiring this software allows Markit to provide the global syndicated loan market with a proven solution for integrating with the newest technology for straight through processing of loan transactions and lifecycle events.”

“We are offering an alternative to expensive and risky internal software builds and helping expedite industry adoption of risk and cost reducing initiatives such as Markit Clear for trade settlement and FpML for electronic communication of loan information,” he added.

Markit recently made headlines after it integrated HSBC’s ALBI, ADBI and AHBI indices to Markit’s iBoxx family of indices for an undisclosed financial sum. Markit’s iBoxx suite consists of a number of indices, including a focus in Asia – its iBoxx Asian Local Bond Index (iBoxx ALBI), Markit iBoxx Asian USD Bond Index (iBoxx ADBI), and Markit iBoxx Asian USD High Yield Bond Index (iBoxx AHBI) are all parts of a leading brand in Asian markets, which Markit aims to reinforce with HSBC’s assimilated indices.

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