Buy-Side Technology Awards 2013: Winners' Circle—Markit

Given the regulatory and operational changes over the past few years in the markets you cover, when it comes to pricing and valuations, what have your areas of focus been?
Armins Rusis: Our pricing and valuations teams have been working with our customers through times of heightened regulatory scrutiny and unprecedented changes in the financial markets. On the pricing front, we have focused on helping our customers enhance transparency, providing them with wider coverage and more context on the cash and derivatives prices we provide. We have, for example, expanded our credit default swap (CDS) sensitivities data to give customers a greater understanding of how prices react to changes in interest rates and other factors. We have also expanded our structured finance pricing to include collateralized loan obligations (CLOs), added high-yield municipal bonds to our muni service in the US, and begun pricing credit index options, a market that previously had very little pricing transparency.
When it comes to portfolio valuations, we have focused on expanding our pricing library and data sources to service our customers’ entire portfolios. This has also enabled us to respond quickly to changing market conditions, such as the industry adoption of overnight index swap (OIS) discounting. We’ve also worked on helping our customers value more complex instruments, specifically within the foreign-exchange (FX) asset class, and we recently started a cleared price distribution and verification service.
What do you see as your future areas of focus, looking ahead into 2014?
Rusis: The regulatory emphasis is shifting to increased and timelier transparency, as well as more defined market risk measurement, particularly for specific segments of the buy side. Consequently, we will be further expanding our pricing coverage, adding mezzanine and equity tranches of CLOs, as well as very illiquid syndicated loans, for example. We will also continue to expand our risk offering to the buy side. We recently added scenario analysis and Value-at-Risk (VaR) calculation capabilities to our portfolio valuation service. These go well beyond the standard risk sensitivities provided alongside valuations and will help our customers comply with new regulatory requirements including Ucits IV, the Alternative Investment Fund Managers Directive (AIFMD), and Solvency II. In 2014, we will continue to expand our risk analysis offering with a new profit-and-loss (P&L) attribution service, which will give customers a full breakdown on the change in mark-to-market of a trade, according to various risk factors.
On the data management side, from your buy-side clients, to what extent have you seen a trend toward utilizing managed services for data management, rather than keeping it in house?
Daniel Simpson: We’re seeing high demand for our managed service offering as firms of all sizes seek to increase their operational efficiency and reduce costs. At the same time, some firms prefer to retain proprietary data and systems in-house. As a result, a hybrid approach to outsourcing is becoming the norm. As confidence in the cloud grows, so will outsourcing.
What are the ways you’re looking to enhance your offering next year?
Simpson: We are investing heavily in our managed service offering. We’ve also increased our solution’s scalability to help financial institutions handle increased data volumes. Additionally, many of our clients’ data management projects are risk-driven. These risk management projects are notoriously data-hungry. We’re using our cleansed data to feed VaR, and are tightly integrating with risk management systems to create a lighter technology footprint.
Given that there are such huge pressures from the regulatory side at the moment, how important is effective data management in ensuring compliance?
Simpson: Hefty reporting requirements are part and parcel of rules such as AIFMD, Dodd–Frank, and European Market Infrastructure Regulation (EMIR). Coming up with a sticking plaster solution isn’t the answer—firms must address the issue that underpins the regulations: data. As a result, data management is an integral part in any organization’s compliance strategy.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Awards & Rankings
Asia Awards 2023 winner's interview: MarketAxess
MarketAxess won the best trading network category in this year’s WatersTechnology Asia Awards, thanks largely to its Open Trading service.
Waters Rankings 2023: Best performance measurement and attribution system provider—MSCI
Product/service: MSCI BarraOne
Waters Rankings 2023 winner's interview: Vneuron
Vneuron Risk & Compliance won the best AML compliance solution provider category in this year’s Waters Rankings.
Sell-Side Technology Awards 2023 winner's interview: Broadridge (BPO)
Earlier this year, Broadridge won the award for the best outsourcing provider to the sell side thanks to its BPO offering.
Waters Rankings 2023 winner's interview: Duco
Duco won the best reconciliation provider category in this year’s Waters Rankings.
Waters Rankings 2023 winner's interview: S&P Global Market Intelligence
S&P Global Market Intelligence won the best artificial intelligence technology provider category of this year’s Waters Rankings.
Asia Awards 2023 winner's interview: RavenPack
RavenPack won the best ESG data provider category in this year’s Asia Awards.
Waters Rankings 2023: Best data analytics provider—RiskVal Financial Solutions
Product/service: RVFI