CLEARING: Markit and KRX Join to Clear Interest Rate Swaps

Traders in Korea can now clear interest rate swaps through Markit.

Markit’s electronic trade processing service for over-the-counter derivatives, MarkitSERV, is now connected to the Korea Exchange (KRX).

KRX started clearing interest rates swaps in March 2014, with mandatory clearing of interest rate swaps denominated in Korean won (KRW) beginning June 30th.

MarkitSERV is the first global trade processing service to connect to KRX, enabling 17 international and Korean banks that are MarkitSERV customers as well as KRX members, to be able to confirm and clear trades seamlessly. In the first week of mandatory clearing, KRW 291 billion (equivalent to $288 million) of interest rate swaps were successfully sent by MarkitSERV for clearing at KRX.

Alex Park, head of Financial Markets at Standard Chartered Bank in Korea, said: “As we move into an increasingly regulated trading world for OTC transactions, we rely on technology and service partners such as Markit to help us connect with clearing houses, clients and repositories.”

Byung Woo Yuh, senior manager, F/X Derivatives Trading Department, Financial Trading Division, Hana Bank, said: “We are pleased to partner with Markit on the KRX clearing initiative. Leveraging MarkitSERV’s connectivity to KRX provides the bank with an efficient and integrated solution to its electronic processing and clearing requirements in Korea, and will also provide us with the ability to connect to a global network of counterparties, clearinghouses, trade repositories and other market infrastructure.”

Henry Hunter, managing director and global head of derivatives processing at Markit, said: “KRX is an important addition to our global OTC clearing gateway service and this expansion demonstrates our commitment to serving the evolving needs of global banks, regional banks and asset managers in Asia.”

In Asia, the MarkitSERV platform also connects customers to the derivatives clearing services run by the Australian Securities Exchange (ASX), Hong Kong Exchanges and Clearing Limited (HKEx), Japan Securities Clearing Corporation (JSCC) and the Singapore Exchange (SGX).