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Foreign Exchange

More IDBs to partner with MarkitServ for FX transactions

More FX market inter-dealer brokers (IDBs) are set to engage MarkitServ – the electronic trade processing provider – for voice-trade affirmation, regulatory reporting and clearing services for FX transactions, according to company FX co-head Keith Tippell.

The additional firms will join BGC Partners, GFI Group, Tradition and Tullett Prebon in using a new FX trade processing platform launched by MarkitServ on Wednesday. The new platform is designed to help IDBs comply with a broad set of incoming regulatory requirements for the FX market from lawmakers in the US and EU, aimed at increasing the level of data created and reported by trading activity in the over-the-counter (OTC) and non-deliverable forwards (NDF) markets for policymakers.

Tippell told EuromoneyFXNews that a range of companies involved in the FX market, including banks, buy-side firms and IDBs, are engaging middleware providers such as MarkitServ to ensure they do not miss regulatory requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act in the US and similar statutes set to for implementation in the EU and Asia.

“Some executing parties – Tier 1 the banks, for example – will have a requirement to report their FX products as part of Dodd-Frank as early as January. So this offering smoothes the path to that," Tippell says. "We’re not reporting for them, but we’re allowing for a much more efficient process for that reporting.”

Tippell adds that MarkitServ’s new FX trade processing platform was developed with standardized functionality in mind for usage by IDBs.

“Standardized functionality is important for the clients of IDBs in terms of getting a normalized standard feed [of data] through, whether it be electronic execution, voice-brokered or swaps execution facility executed,” says Tippell.

“But we have the ability with our technology to take the feed from IDBs in whichever technology choice they prefer. Likewise, for the banks, we’ll be able to stream a feed of trades and status updates based on what’s happened with the trade in a format and protocol of the bank’s choice.”

Tippell also revealed that MarkitServ is set to “build out” later this year to a fourth FX exchange to provide connectivity for data reporting to central counterparty (CCPs) clearing services for currency transactions. The company already streamlines FX trading data reporting to three CCPs: CME, LCH.Clearnet and Singapore Exchange.

In April, MarkitServ announced an agreement with Swift, the financial messaging provider, to deliver trades from Swift to multiple FX CCPs via its FX clearing gateway.

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