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Foreign Exchange

MarkitServ and Swift connect for FX clearing

MarkitServ, the dominant trade-processing vendor for the over-the-counter (OTC) derivatives market, has announced an agreement with Swift, the financial messaging provider, to deliver trades from Swift to multiple FX central clearing counterparties (CCPs) via its FX clearing gateway.

The linkage, which initially will be used for FX non-deliverable forward (NDF) transactions, will provide a single point of contact for the more than 10,000 financial institutions and corporations that use Swift globally to multiple FX CCPs. Under the terms of the agreement, NDF trade messages sent over Swift will be automatically routed onwards to the designated FX CCP for clearing.

When parties elect to clear an FX trade, MarkitServ will automatically receive transaction data from Swift, match the trade, send it to the clearing broker for acceptance, and then deliver accepted trades to the designated CCP.

Once the trade is cleared, a notification will be sent from MarkitServ to the originating party via the Swift network.

MarkitServ’s FX clearing gateway was launched last month and provides a single point of access for market participants to match, legally confirm and route OTC FX transactions to nominated CCPs. The service is live with LCH.Clearnet and Singapore Exchange, and certified by CME.

Paul Walker, a managing director in Goldman Sachs’ securities services, welcomed the initiative as a milestone on the path towards FX clearing.

“It will provide the market a solution that allows clients to avoid the resource burden and challenge of developing their own processing solutions to manage the complexity of new FX clearing flow,” he says.

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