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MarkitSERV unveils pre-trade credit checking solution for OTC derivatives market

MarkitSERV, an electronic trade processing service for OTC derivative transactions, has rolled out its new pre-trade credit checking technology MarkitSERV Credit Centre for the OTC derivatives market.

The new technology, which has been developed using Cinnober’s ultra-low-latency infrastructure, will enable the companies to comply with the regulatory requirements, including Dodd-Frank.

It also offers buy-side firms a consolidated view of the credit available to them from their FCMs to regional banks and other organizations that access clearing through futures commission merchants (FCMs).

Apart from this, the newly debuted platform assists institutions to determine how they deploy their credit lines among multiple clearing venues.

FCMs will update credit lines daily as client portfolios change, and electronic execution venues will "ping" Credit Centre to confirm the availability of credit when a trader wants to post a price or execute an order, eliminating trade failing because a firm surpasses its credit limit.

The technology company said that the service can also be used for checking and managing credit lines required for off-facility voice and block trades.

Technology development for the first phase of Credit Centre has been completed and on-boarding for buy-side firms and FCMs is already underway.

At the outset, MarkitSERV Credit Centre will cover OTC credit, foreign exchange and rates and will expand to other instruments including equity derivatives, futures and options and to managing credit for non-cleared trades.

Together owned by The Depository Trust & Clearing Corporation (DTCC) and Markit, MarkitSERV offers a single gateway for OTC derivatives trade processing.