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IHS Markit adds CME Clearing to derivatives netting synchronization service

First Published 13th December 2016

CME Clearing deploys IHS Markit's MarkitSERV netting synchronization service.

Sunil Cutinho, CME Clearing

Sunil Cutinho, CME Clearing

IHS Markit, the provider of information, analytics and solutions, has added CME Clearing to its netting synchronization service from MarkitSERV, the trade processing platform for OTC derivatives. The service provides a single source of electronic messages from multiple clearinghouses to help banks and asset managers update risk management systems when trades are netted or compressed at the clearinghouse.

Clearinghouses net exposures to help firms reduce the capital and operational costs associated with OTC derivatives. For CME, the service initially supports netting of cleared interest rate swaps, basis swaps, forward rate agreements, overnight index swaps and swaptions.

Sunil Cutinho, President of CME Clearing, said: "MarkitSERV synchronization is an important solution for our clients because it enables straight-through processing of post trade services like netting, coupon blending, and compression. This also paves the way to deliver further efficiencies and innovations as we scale out swaption clearing and develop listed invoice spread trading."

In addition to automating trade booking, firms can also reconcile all OTC derivatives trades, cleared and uncleared, with their counterparties and clearinghouses with the data maintained centrally by MarkitSERV. MarkitSERV can also send regulatory reports to update trade repositories on behalf of customers.

MarkitSERV introduced netting synchronization with LCH in November 2015. More than 20 firms are actively using the functionality.