MarketAxess has subscribed to Markit's RED service to drive the company's client-to-dealer electronic trading platform for credit derivative indices.
Markit RED is the industry standard for reference entity and reference obligation identifiers in the credit markets, and MarketAxess hopes to launch its new platform in September. RED covers the requirements of the single name trading environment and has also developed a standard methodology for identifying and numbering the major iTraxx and Dow Jones CDX credit indices which have enhanced the liquidity of the credit derivative market since their launch.
MarketAxess will use the RED data to facilitate execution on the standard index contracts and will provide a feed of the information directly into The Depository Trust & Clearing Corporation's Deriv/SERV Trade Affirmation and Matching Service. This will provide seamless straight-through-processing, from execution to confirmation whilst managing operational risk.
"RED is the market standard identification system for the credit indices and we wanted this to be the identifier on our electronic trading platform," said Barry Goldenberg, Credit Derivatives Product Manager at MarketAxess. "Our approach from the start has been to focus on partnering with other market leaders like Markit RED to bring superior technology solutions to our clients and foster greater efficiency for the market."
Peter Axilrod, Managing Director of New Business Development at DTCC added: "The implementation of the MarketAxess electronic trading platform for the credit indices is made that much easier by the use of RED. RED has been part of the DTCC Deriv/SERV since inception and matching on RED identifiers for all credit derivatives greatly enhances the value of our service."
Penny Davenport, Director of Markit RED commented: "There is a lot of focus on improving the operational environment in the fast-growing credit markets and RED heightens the value added by the MarketAxess/DTCC integration."