Markit and The Depository Trust & Clearing Corporation (DTCC) will form a jointly owned, strategic OTC derivatives partnership, according to todays release from Markit.
Markit will contribute its recently acquired Markit Wire platform as well as other trade processing services including Markit Trade Manager, Markit Tie Out and Markit PortRec. DCC will contribute its Deriv/SERV matching and confirmation engine, AffirmXpress, MCA Xpress and Novation Consent services.
The new company will be governed by an 11-member board of directors. Michael Bodson, executive managing director for DTCCs business management and strategy overseeing all DTCC business lines, will be chairman. Jeff Gooch, executive vice president of Markit, will be chief executive officer.
The release said the new company, whose name is yet to be determined, will provide OTC derivative market participants a single gateway for confirming OTC derivative transactions globally. It also said the initiative should accelerate the adoption of electronic processing solutions across the rapidly growing, $454 trillion OTC derivative market, where half of transactions are still confirmed on paper.
In addition, the new company will offer automated trade affirmation, trade allocation and novation consent solutions to the market on a cross-product basis.
The company will be headquartered in London, with a second major center of operations in New York City, and representative offices in Europe and Asia. It will have over 1,100 financial institutions as customers, and annual transaction volumes of over 7 million across the OTC interest rate, credit and equity derivative markets.
The agreement will become effective upon completion of due diligence, regulatory filings and regulator approval.