New York – There is talk on the street that Markit is purchasing the TheMarkets Broker Vote service. Not really a surprise, given the roll-up that Markit has been undertaking in the pre-trade and post-trade services market recently.
TheMarkets Broker Vote service is a web-based service that allows clients track brokers and other service providers. The broker vote service allows participants around the world to monitor upcoming meetings, rate meetings that have been conducted and to make comments on brokers (either positive or negative) over the period between votes. This allows more accurate assessment of the client-broker relationship when the vote occurs.
In September, Standard and Poor’s Capital IQ unit purchased the research business of The Markets.com, but the broker vote service was left out of the deal. It is expected that Markit will further buttress its broker vote services by acquiring TheMarkets Broker Vote. Previously, Markit acquired Wall Street on Demand (July 2010) which also has a broker vote service as well as research distribution services. The main third-party broker vote service is provided by BNY Convergex’s Cogent product, which features broker vote services alongside Convergex’s commission management platform. Whether entering the broker vote services industry is a distinct strategy of Markit, or whether it is part of a larger strategy, remains unclear.
Markit started out in 2001 as a pricing service in the OTC derivatives market for some of the more complex derivatives (credit default swaps). Currently, Markit is a leading, global financial information services company with over 1,900 employees. The company provides independent data, valuations and trade processing across all asset classes in order to enhance transparency, reduce risk and improve operational efficiency. Its client base includes the most significant institutional participants in the financial marketplace. It is a major player in the OTC pre- and post-trade derivatives trading space. Strategically, they have been executing acquisitions in the trade processing and research space at a rapid pace in recent months.
In 2009, MarkitSERV was formed by Markit and DTCC (Depository Trust Clearing Corp) who joined forces to provide trade confirmation and position reconciliation services to the OTC derivative market globally. DTCC is a heavy weight in the clearing business and is one of the firms that is in the business of clearing OTC derivatives transactions. MarketSERV is well-positioned to be a contender as a “Swap Data Repository” and clearing agent as defined by the Dodd-Frank legislation and it would seem that this is at least part of its overall strategy.