Markit unveils European asset-backed securities transparency initiative

Markit, a provider of independent data, portfolio valuations and over-the-counter derivatives trade processing, has announced it is working with leading institutions to facilitate the distribution of European asset-backed securities prospectuses and investor reports in a freely available manner.

In response to calls by the European Commission for greater transparency in the European asset-backed securities markets, Markit is developing an industry-led solution to encourage best practice with the support of groups including BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, Morgan Stanley, Royal Bank of Scotland and UBS.

Amany Attia, a managing director and head of European securitised products at Lehman Brothers, says: 'This initiative shows that the structured finance industry is taking the lead in tackling the need for greater transparency in the European ABS markets today.

'A number of dealers have made a commitment to support Markit's platform, and we hope that this greater availability of key deal and performance information will restore investor confidence in these markets.'

Lee Rochford, head of fixed income securitisation for Europe at Royal Bank of Scotland, said: 'This initiative will address the European Commission's calls for greater transparency in the structured finance markets, and we look forward to working with the broader group to bring best practice to the European ABS markets.'

Markit will consolidate prospectuses and investor reports for European ABS transactions on a single web site and will make the information freely available to all buy-side and sell-side firms and third parties, as permitted by local regulation.

Rick Watson, head of the European Securitisation Forum, says: 'This will bring greater transparency to the European structured finance industry, and will work in concert with the ESF's own efforts to boost the availability of performance information in these markets.'

Ben Logan, managing director for structured finance at Markit, adds: 'This initiative will streamline the performance surveillance process. We also expect it to spur the development of analytics and valuations by third party providers which will ultimately bring greater price discovery and liquidity to the European ABS markets.'

The firm plans to launch Markit Valuations Manager, a global multi-bank, cross-asset client valuations platform that is scheduled to go live in the second half of this year and aims to offer clients increased transparency in OTC derivative and cash valuations by providing accurate and consistent third-party valuations on a single electronic platform.

Markit offers an integrated pricing and performance monitoring service for European ABS securities, providing clients with collateral performance information alongside daily independent consensus bond pricing sourced from 27 market makers. Additional dealers are expected to join this new initiative over the coming months, and the website should be operational by the end of the third quarter.

The company receives daily data contributions from 90 dealing firms, and its services are used by almost 1,000 institutions to enhance trading operations, reduce risk and manage compliance.

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