MarkitSERV Launches Clearing Certainty Hub for OTC Derivatives Market Includes FX & Rates
MarkitSERV, the electronic trade processing service for OTC derivative transactions, announced the launch of MarkitSERV Credit Centre, a pre-trade credit checking solution for the OTC derivatives market. MarkitSERV Credit Centre provides clearing certainty for trades executed in electronic marketplaces, including swap Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018. Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018. Read this Term facilities. This will help firms meet regulatory requirements, including Dodd-Frank.
FCMs will update credit lines during the trading day as client portfolios change, and electronic execution venues will “ping” Credit Centre to confirm the availability of credit at the time a trader wishes to post a price or execute an order, removing the risk of a trade failing because a firm exceeded its credit limit. The service can also be used for checking and managing credit lines required for off-facility voice and block trades.
The ultra-low-latency system required for Credit Centre is provided by TRADExpress from Cinnober, a leading global supplier of solutions and services to major trading and clearing venues.
Jeffrey Maron, Managing Director at MarkitSERV, said: “As a trusted provider of financial market infrastructure, MarkitSERV is highly-qualified to offer clearing certainty through our Credit Centre. Dodd-Frank requirements give rise to a series of challenges for the industry around electronic trading and central clearing. The need for trade certainty is top of the list. Our ultra-low-latency service will allow participants to transact with confidence.”
Veronica Augustsson, CEO at Cinnober, said: “We are pleased to have been chosen to provide the low-latency, robust system required by MarkitSERV Credit Centre. Our proven, high-performance TRADExpress software makes us the natural choice for powering MarkitSERV’s clearing certainty hub.”
Will Rhode, Principal and Director of Fixed Income Research at TABB Group, said: “Ever since regulators proposed a horizontal structure for the clearing and execution of swaps, the industry has been struggling to understand how to manage the so-called ‘certainty of execution’ issue, or the risk of a trade being rejected in a fragmented clearing environment. Solutions that help rationalise this and provide greater visibility into credit eligibility will be welcomed by clearing brokers, executing brokers and swaps users alike.”
Technology development for the first phase of Credit Centre is complete and onboarding for buy-side firms and FCMs is already underway. Firms can register at MarkitSERV.com to begin testing.
MarkitSERV Credit Centre will initially cover OTC credit, foreign exchange and rates and will expand to other instruments - such as equity derivatives, futures and options - and to managing credit for non-cleared trades. A centralised credit limit hub is a cost-effective solution for market participants because they can view and manage credit with one connection rather than creating and maintaining connections to every trading and clearing venue in the market.
MarkitSERV, the electronic trade processing service for OTC derivative transactions, announced the launch of MarkitSERV Credit Centre, a pre-trade credit checking solution for the OTC derivatives market. MarkitSERV Credit Centre provides clearing certainty for trades executed in electronic marketplaces, including swap Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018. Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018. Read this Term facilities. This will help firms meet regulatory requirements, including Dodd-Frank.
FCMs will update credit lines during the trading day as client portfolios change, and electronic execution venues will “ping” Credit Centre to confirm the availability of credit at the time a trader wishes to post a price or execute an order, removing the risk of a trade failing because a firm exceeded its credit limit. The service can also be used for checking and managing credit lines required for off-facility voice and block trades.
The ultra-low-latency system required for Credit Centre is provided by TRADExpress from Cinnober, a leading global supplier of solutions and services to major trading and clearing venues.
Jeffrey Maron, Managing Director at MarkitSERV, said: “As a trusted provider of financial market infrastructure, MarkitSERV is highly-qualified to offer clearing certainty through our Credit Centre. Dodd-Frank requirements give rise to a series of challenges for the industry around electronic trading and central clearing. The need for trade certainty is top of the list. Our ultra-low-latency service will allow participants to transact with confidence.”
Veronica Augustsson, CEO at Cinnober, said: “We are pleased to have been chosen to provide the low-latency, robust system required by MarkitSERV Credit Centre. Our proven, high-performance TRADExpress software makes us the natural choice for powering MarkitSERV’s clearing certainty hub.”
Will Rhode, Principal and Director of Fixed Income Research at TABB Group, said: “Ever since regulators proposed a horizontal structure for the clearing and execution of swaps, the industry has been struggling to understand how to manage the so-called ‘certainty of execution’ issue, or the risk of a trade being rejected in a fragmented clearing environment. Solutions that help rationalise this and provide greater visibility into credit eligibility will be welcomed by clearing brokers, executing brokers and swaps users alike.”
Technology development for the first phase of Credit Centre is complete and onboarding for buy-side firms and FCMs is already underway. Firms can register at MarkitSERV.com to begin testing.
MarkitSERV Credit Centre will initially cover OTC credit, foreign exchange and rates and will expand to other instruments - such as equity derivatives, futures and options - and to managing credit for non-cleared trades. A centralised credit limit hub is a cost-effective solution for market participants because they can view and manage credit with one connection rather than creating and maintaining connections to every trading and clearing venue in the market.