DTCC and Markit Will Automate Loan Reconciliation for Institutional Investors

- DTCC’s Loan/SERV Reconciliation Service will link with Markit WSO to reconcile loan positions -

DTCC and Markit Will Automate Loan Reconciliation for Institutional Investors

The Depository Trust & Clearing Corporation (DTCC) and Markit today announced that they are working together to automate syndicated loan reconciliation for leading institutional investors and other buy-side firms by creating a link between DTCC’s Loan/SERV Reconciliation Service and Markit’s Wall Street Office (Markit WSO) loan management system.

DTCC’s Loan/SERV Reconciliation Service automates and streamlines the processing of commercial loans by enabling agent banks and lenders to view and reconcile loan positions on a daily basis. Prior to the launch of this service, lenders and banks reconciled loan positions independently of one another, a process prone to errors, miscalculations and delays.

Markit WSO provides institutional investors with a range of services for managing loan portfolios, including an accounting system for recording loan trades and principal and interest payments, as well as real-time data and pricing on global syndicated loans.

Markit will provide customers with a loan position file for upload to DTCC. This position file will enable Markit WSO customers to access the Loan/SERV Reconciliation Service and compare their loan positions with those of the agent banks. Transactions and balances that do not match will be highlighted so both parties can quickly correct differences. DTCC’s Reconciliation Service currently provides information on more than 65,000 loan positions that customers can access via a Web log-on or file upload.

“Our link to DTCC will enable our customers to view and reconcile individual loan positions more efficiently,” said Joe Widner, managing director of Markit. “This will help rectify discrepancies, promote accurate reporting, including profit-and-loss figures, and enable our clients to manage their businesses more effectively.”

Pierre Batrouni, managing director of Operations at MJX Asset Management and a Markit WSO customer, said the enhancement will provide major benefits. “Having daily checks on our investments will enable us to make corrections quickly and easily, dramatically boosting efficiencies and giving us more time to focus on our clients and their needs,” Batrouni said.

“Markit’s link to the Loan/SERV Reconciliation Service will help shape the dynamics of the syndicated loan market,” said Chris Childs, DTCC vice president, Global Loans Product Management. “With this service, DTCC and Markit are helping to lay the groundwork for change in the market, eliminating an inefficient manual process and replacing it with a streamlined, automated solution.”

Markit WSO consists of a suite of software products and services designed to make the management of bank loan portfolios and structured deals an efficient and accurate process. This comprehensive system, which is used by institutional investors managing more than $1 trillion in assets, provides immediate access to real-time data in more than 150 standard reports.

DTCC’s Loan/SERV is an evolving suite of automated and value-added services for the global syndicated loan market. The Reconciliation Service, which is used by leading global banks such as Citi, Deutsche Bank and JPMorgan, was introduced in 2008, along with the Loan/SERV Messaging Service, which provides a secure and automated network for the transmission of standard loan messages between agent banks and lenders in the syndicated loan market.

DTCC announced earlier this year that it has adopted Markit’s new entity identifier system (MEIs) for loans reconciled by Loan/SERV. According to leading industry groups in Europe and North America, the lack of standard, unique identifiers has slowed growth and perpetuated operational risks in the loan market. Markit’s system identifies market participants and increases coverage for individual loans.

The initiative is separate from the existing Markit PortRec service, which enables financial institutions to reconcile over-the-counter (OTC) derivative positions with the option to access counterparty valuations electronically.

Loan/SERV is a service of DTCC Solutions LLC, a subsidiary of DTCC.

About DTCC

The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with financial firms and third parties who market these products.

DTCC's depository provides custody and asset servicing for more than 3.5 million securities issues from the United States and 110 other countries and territories, valued at $27.6 trillion. In 2008, DTCC settled more than $1.88 quadrillion in securities transactions. DTCC has operating facilities in multiple locations in the United States and overseas.

About Markit

Markit is a financial information services company with more than 1,100 employees in Europe, North America and Asia-Pacific. Over 1,500 financial institutions use our independent services to manage risk, improve operational efficiency and meet regulatory requirements. For more information, see www.markit.com .

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Contact:

DTCC
Edward C. Kelleher, +1 212 855 5301
eckelleher@dtcc.com
or
Markit
John Dooley, +1 212 205 1310
Vice President, Corporate Communications
john.dooley@markit.com