There are many companies that offer buy-side firms with pricing and valuation services, but few have the reach and reputation that Markit does for its work in typically hard-to-price assets. That’s hardly surprising when you consider that the company, formed by CEO Lance Uggla in 2001, was created specifically to fulfill that market niche. Since then, its growth has been meteoric, to the point where it now employs 3,000 people across global locations.
Gaining accurate and reliable pricing in markets that change as rapidly as the derivatives markets do, is a challenge, even for the best resourced and competent operators. Covering a range of instruments, from credit-default swaps (CDSs), municipal, cash and corporate bonds through to portfolio valuations, Markit’s use of technology and intelligence separates it from its competitors. The addition of Value-at-Risk (VaR) and stress-testing measures with portfolio valuations, for example, provides buy-side firms with a leg up in handling the demands of the new regulatory environment. Markit accomplishes this by taking its historically bank-focused risk engine and combining it with its cross-asset class datasets, blending technology with complex and intensive financial mathematics.
Other buy-side boons from the firm have been the addition of credit index options data to its CDS coverage, pricing for collateralized loan obligation (CLO) tranches, and a bond calculator for municipal and corporates returns. Illustrating its reach and diligence, Markit performs 17 daily price runs for corporate bonds, incorporating four new batch times for globally-traded instruments.
In a further nod to the changing derivatives landscape, the firm has integrated its portfolio valuations service with MarkitSERV, its over-the-counter trade-processing service, and enhanced its CDS coverage with more credit index price snaps that reflect banks’ clearing contributions.
This win marks the seventh time that Markit has won this category in the Buy-Side Technology Awards, making it one of only three companies to have won the gong in the same category since the awards were first launched in 2007. With the new electronic framework around the previously opaque derivatives markets, it would appear that Markit’s domination of this space is unlikely to be challenged anytime soon.
“Customers turn to Markit for our ability to value a full range of cash and derivative instruments across asset classes and degrees of complexity. We continue to seek to deliver the highest level of quality of data and transparency throughout our pricing and valuations services. With the expansion of our services to cover more instruments, offer more frequent pricing snaps and flexibility for data delivery, we continue to evolve alongside our customers and this award is a reflection of those efforts.”
—Armins Rusis, managing director and head of information, Markit
James talks about his trip to Chicago and some of the interesting topics that came up (including a look at disaster recovery demands). Then Anthony and James touch on ISDA's initial margin rules, with Phase 3 going live next year.Subscribe to Weekly Wrap emails