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IHS Markit's MarkitSERV enables end-to-end automation for cross-currency swaps

First Published 8th November 2017

Integrations with CLS and LCH SwapAgent reduce post trade risk and cost in managing complex OTC derivatives

London - IHS Markit, a provider of critical information, analytics and solutions, has announced new trade technology solutions from MarkitSERV that enable full automation of settlement and margin payments in the cross-currency swaps market.

Cross-currency swaps expose counterparties to settlement risk due to the high value of initial and final principal exchanges that take place in this $30 trillion market. New automation, workflow and integrations between MarkitSERV and both CLS and LCH SwapAgent enable firms to automate swaps payments, including initial and final notional exchange settlements through CLS and variation margin payments with LCH Swap Agent.

At the beginning and end of trades, new auto-fixing functionality from MarkitSERV automatically applies foreign exchange rates for initial and final notional amounts for cross-currency swaps and basis swaps settled in CLS. This enhances existing integration with CLS which streamlines the settlement process and mitigates settlement risk for cross-currency swaps by linking CLS's payment-versus-payment (PvP) settlement service to MarkitSERV's trade confirmation service.

During the life of the trade, new connectivity from MarkitSERV to LCH SwapAgent delivers interest rate swaps trade data to SwapAgent, which acts as the central calculation agent for variation margin and settles cash and collateral exchanges. MarkitSERV and LCH will extend this functionality to the cross-currency swaps market when those instruments go live at LCH SwapAgent later this year.