Markit, the leading provider of independent data, portfolio valuations and OTC derivatives trade processing to the global financial markets, today announced plans to launch the first global, multi-bank, cross-asset client valuations platform.
Markit Valuations Manager will bring considerable operational efficiency and transparency to a buy-side firm’s valuation process by offering electronic delivery of dealer OTC derivative and consensus cash valuations, alongside Markit’s own independent valuations, on a single platform.
The initiative comes as recent regulatory and accounting changes have increased the importance of reliable, independent valuation sources for funds. Markit Valuations Manager will provide the buy-side with an accurate, efficient tool to handle the increased regulatory and accounting burden, and will enhance the integrity of position information, counterparty marks and third-party valuations.
Jeff Gooch, executive vice president and head of Valuations and Trade Processing at Markit, said: "Regulators around the world are increasingly focused on the importance of greater transparency, establishing best practice for client valuations, and a trusted, independent process is key. Markit Valuations Manager is a tremendously exciting initiative which will allow financial institutions to better understand and manage their risks at this challenging time."
Chris Ryan, head of Global Credit Fixed Income and FICC Administration at UBS, said: "UBS is pleased to join with our peers and Markit to develop a valuation service which, in this challenging market environment, will provide our clients with greater transparency and more consistency in third-party valuations while increasing the efficiencies of this service."
"We are excited to work closely with Markit on this cross-asset class client valuations initiative. The new service should provide significant productivity gains for banks and clients, and improve audit trails between counterparties," said Lawrence Waller, managing director, Investment Banking Operations at JPMorgan.
Six leading global investment banks have agreed to work with Markit to support the launch of the platform. The banks are: Citi, Credit Suisse, Goldman Sachs, JPMorgan, Merrill Lynch and UBS. They will provide Markit with end-of-day and end-of-month client valuations for OTC derivative instruments and cash securities. Markit will aggregate this information and offer clients access to a composite of dealer marks for cash securities and counterparty present values for OTC derivative positions.
Clients will be able to compare the dealer marks with Markit’s independent valuations. Additionally, the platform will offer seamless integration with Markit’s Trade Processing solutions to allow full life cycle support for OTC derivative transactions.
David Lefferts, managing director at Markit, will lead the initiative. Markit aims to launch the platform in the second half of 2008 with core coverage of bonds and derivatives. The platform will subsequently be expanded in phases to include more banks and all major cash and derivative asset classes, including structured instruments such as asset-backed and mortgage-backed securities.