Markit, a provider of independent data, portfolio valuations and OTC derivatives trade processing to the global financial markets, has announced its plans to launch a multi-bank, cross-asset client valuations platform.
Markit says that its Valuations Manager platform will bring operational efficiency and transparency to buy-side firms' valuation processes by offering both electronic delivery of dealers' OTC derivative valuations and its own independent valuations.
The initiative comes on the back of recent regulatory changes that have increased the importance of reliable, independent valuation sources for funds, according to Markit. The firm says its Valuations Manager platform provides buy-side firms with an efficient tool to handle the increased regulatory burden, and will enhance the integrity of position information, counterparty marks and third-party valuations.
“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," comments Jeff Gooch, executive vice president and head of valuations and trade processing, Markit. "Markit Valuations Manager is an exciting initiative which will allow financial institutions to better understand and manage their risks at this challenging time,” he adds.
Markit reports that investment banks Citi, Credit Suisse, Goldman Sachs, JPMorgan, Merrill Lynch and UBS have agreed to work with Markit to support the launch of the platform. The banks will provide Markit with end-of-day and end-of- month client valuations for OTC derivative instruments and cash securities. Markit says it 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 integration with Markit’s Trade Processing solutions to allow full lifecycle support for OTC derivative transactions.
"UBS will 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,” says Chris Ryan, head of global credit fixed income and FICC administration, UBS.
"The new service should provide productivity gains for banks and clients, and improve audit trails between counterparties," comments Lawrence Waller, managing director, investment banking operations, JPMorgan.
David Lefferts, managing director, 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, says the firm.