Markit Readies Front-Office Upgrade for OTC Charges

Regulations around the trading of over-the-counter (OTC) derivatives instruments are now mandating calculations of elements such as credit valuation adjustment (CVA), minimum initial margins, risk capital charges, default fund contributions and other areas, depending on whether a product is centrally cleared or not. Markit's Integrated Resource Management (IRM) system allows for a consolidated view of balance sheet operations to support the implementation of these set-offs and calculations.

"The economics of OTC derivatives are changing. There are numerous capital and funding costs that now need to be considered before executing a trade," says Paul Jones, director at Markit Analytics. "By bringing our established CVA, risk-weighted assets and initial margin solutions together, our customers can run interactive scenarios with ease to understand the trade-offs between these components."