CME Clearing Joins IHS Markit's Netting Synchronization Service

The vendor's service offers a single source of electronic messages from multiple clearinghouses, helping banks and asset managers update their risk management systems after trades are netted or compressed at clearinghouses.

"Netting introduces a new set of post-trade events to the OTC derivatives market and the need for banks and asset managers to consume netting data from multiple clearinghouses illustrates the value of MarkitSERV's central hub and global network," said Claire Lobo, managing director and head of business development for MarkitSERV at IHS Markit, in a statement. "The workflow and integrations we offer automatically synchronize bank risk systems when position data changes due to netting, novation, termination or other event in the derivatives lifecycle."

Firms can lower their capital and operational costs with OTC derivatives via clearinghouses net exposures. The service will initially cover netting of cleared interest rate swaps, basis swaps, forward rate agreements, overnight index swaps and swaptions for CME.

"MarkitSERV synchronization is an important solution for our clients because it enables straight-through processing of post-trade services like netting, coupon blending, and compression," said Sunil Cutinho, president of CME Clearing, in a statement. "This also paves the way to deliver further efficiencies and innovations as we scale out swaption clearing and develop listed invoice spread trading."