Buy-Side Technology Awards: Best Pricing/Valuations Service—Markit

Markit is a stunning success story: The firm started out in 2001, founded by Lance Uggla and a group of colleagues working in credit trading at TD Securities in Toronto, who identified the industry’s need for reliable and transparent credit default swap (CDS) valuation data. The firm has since evolved into the industry standard in the valuations realm, with over 2,200 employees in 16 offices, offering buy- and sell-side firms a veritable one-stop shop for independent data, valuations and trade processing across all asset classes. Currently, Markit, headquartered in London, provides multi-asset pricing and portfolio valuations services for CDS, bonds, leveraged loans, equities, and structured products.

During 2011, Markit expanded the scope of its pricing/valuations service across a number of areas, including:

Derivatives: Markit CDS Intraday—Markit’s intra-day prices are now streamed with a 30 minute-delay; Markit CDS Same Day—Markit has added two more snaps to its previous four global CDS price snaps to provide more timely pricing information; clearing prices—Markit has added CDS settlement prices from the Japan Securities Clearing Corp. (JSCC) and the London Clearing House (LCH), and clients can now receive CDS clearing prices from ICE, Eurex, the JSCC and LCH from a single source; portfolio valuations—in December last year, Markit started using overnight-indexed swap (OIS) discounting to value interest-rate swaps and swaptions in a number of currencies. Markit is set to introduce OIS discounting for CDS before the end of this year.

Cash Bonds: Municipal Evaluated Bonds—in September this year, Markit started applying a corporate-credit approach to pricing municipal bonds, utilizing quote data and other sources of observable market data to create daily prices for 900,000 securities; Global Corporate Evaluated Bonds—in 2011, the service focused on expanding coverage and developing new quality controls. Currently, 85,000 bonds are priced (with four intra-day snaps). Coverage of issuers in emerging markets and less liquid securities expanded during 2011.

Structured Finance: Non-Agency RMBS—by the end of September this year, Markit was providing daily pricing for nearly all non-agency Residential Mortgage-Backed Securities (RMBS); Agency RMBS—by December, Markit will provide daily pricing for approximately 100 percent of the agency RMBS pass-through universe.

This is Markit’s fourth win in this category since the inaugural awards back in 2007, having won in 2007, 2008, and 2010. —VBA