Markit has acquired systems integration software from JPMorgan that will allow the information services company to offer its global syndicated loan clients more automated trade processing services.
The deal, announced Tuesday, puts Markit in charge of a platform that can bridge the workflow between the loan accounting systems of buyside and sellside firms through the commonly used loan settlement platform operated by Markit.
Markit will have to adapt it to work with systems other than JPMorgan’s outsourced commercial lending and servicing platform (Loan IQ from Misys), but plans to begin deployments this summer.
The introduction of this “middleware” platform to Markit’s offerings will provide more gateways and common formats between firms on either side of the table and pushes the industry toward the goal of automated, straight-through processing; it will both speed up trade settlement and greatly reduce “exception” items that can stop or halt trades.
“One of the critical elements in getting trades to settle more efficiently is making sure there are no breaks between what the agent bank has in their system, and what the actual buyside or lender has in their system,” said Scott Kostyra, a managing director and head of loan settlement for Markit’s processing division, in an interview with Asset Securitization Report.
Markit will develop alternate versions of the middleware for buyside and sellside firms, which often use custom software developed in-house, may be old or outdated and only work with Markit Clear if data and messages are input manually (sometimes from faxes and emails).
“What we will be doing is making [the software] more generic, so it will have applicability to other platforms,” said Kostyra.
The latest acquisition follows Markit’s takeover of the Loan/SERV position reconciliation platform from The Depository Trust & Clearing Corporation, announced in January. The Loan/SERV system is to be integrated into Markit Clear’s real-time loan inventory capabilities that can give buyside/sellside firms more accurate, up-to-date information on trade and book positions of counterparties.
Markit plans to begin deploying the former JPMorgan middleware platform to clients in the second half of the year. Financial terms of the deal were undisclosed.