Post-trade processing specialist specialist MarkitSERV has seen a jump in buy-side subscriptions as Dodd-Frank Act rules mandating post-trade reporting and clearing of OTC derivatives kicked in.
The firm also saw a significant jump in use of its clearing connectivity service, which processed over 600,000 trades between March 11 and the end of July.
In anticipation of new clearing rules, the volume of trades submitted for clearing through MarkitSERV leapt up 48% from the same period in 2012. This figure includes more than 120,000 “client” trades, those in which at least one party is not a member of a clearinghouse. Over 300 new buy-side subscribers signed up after they were phased into the regulations requiring the post-trade reporting and clearing of certain OTC derivatives in June.
MarkitSERV recently added LCH. Clearnet to its roster of clearing providers in June. Other CFTC-registered derivatives clearing organisations (DCOs) with connectivity to MarkitSERV include CME, ICE Clear Credit, ICE Clear Europe, LCH.Clearnet’s SwapClear US and UK, and Options Clearing Corp.
It is also linked with Eurex Clearing AG and LCH. Clearnet-owned CDSClear, which both have DCO applications pending.
The mandatory clearing of certain OTC derivatives, including interest rate swaps and credit default swaps, came into effect on 11 March and is being implemented in three stages. Most buy-side firms were required to comply with the rules from 10 June.
Henry Hunter, managing director and head of product management for MarkitSERV, said: “The CFTC’s Category 2 deadline affected a large number of firms and the industry has accomplished a lot in a short time. MarkitSERV gives customers a practical cross-asset solution that helps them process, clear and report OTC derivative transactions.”