NAB Custodian Services (NCS), a securities services provider in Australia, yesterday announced the appointment of Markit Group as provider of its OTC derivatives valuations. Markit provides independent data and portfolio valuations to the global financial markets.
Markit will provide NCS with an independent, post-trade calculation of the gross asset value of a portfolio of OTC derivative trades. Valuations will be provided on a daily basis for vanilla and exotic instruments, and a range of asset classes including credit, equity, currency, energy and interest rates.
John Treloar, general manager at NAB Custodian Services, says, “We chose Markit in light of their reputation as the leading valuations provider for complex, illiquid instruments and for the transparency of their process since, unlike other model-driven services, Markit’s valuations are calibrated with a rich proprietary dataset drawn from the leading market makers. Markit enables us to deal with the most challenging new securities with ease.”
“We are delighted that NCS has decided to outsource their derivatives valuations to Markit, and regard the agreement as a key milestone for our valuations strategy in the Asia Pacific region,” comments David Crammond, managing director of Markit Asia. “As investors extend the scope and complexity of their portfolios across the major derivative asset classes, it is gratifying to see growing numbers of custodians and fund administrators seek Markit’s expertise in this complex area,” he adds.
“There has been a noticeable increase over the last twelve months in the demand for reliable marks on OTC derivative assets”, says Tom McNerney, managing director of valuations at Markit. ” We expect this demand to grow as regulatory bodies continue to stress the importance of using independent third party valuations instead of counterparty marks, and investors put pressure on their investment managers to embrace best practice in risk management,” he notes.