FIA and Markit Announce Key Operational Milestones
Time to execute give-up agreement dramatically reduced
Washington, D.C. and London, England - The Futures Industry Association and Markit today announced that their global electronic give-up agreement system (EGUS) has achieved key operational efficiency milestones since its launch in February 2007. Further efficiencies are expected when the second phase of the project is released in November 2007.
In just six months, EGUS has cut the average time it takes to execute give-up agreements from 39 days to just two days. Recently, a give-up agreement was fully executed in 45 minutes – unheard of before EGUS.
Forty-five executing and clearing brokers, and 85 customer/traders, representing more than 235 entities, are now active on EGUS. They have executed a total of 1,500 agreements through the platform since its launch.
EGUS is an electronic platform that allows executing brokers, clearing brokers and their customers to create, amend, review and execute give-up agreements online. A give-up agreement occurs when a futures market participant uses one broker to execute a trade and another to clear it, thus requiring the executing broker to “give up” the trade to the clearing broker. The electronic platform is provided by Markit.
The second phase of the project, to be released in November, focuses on delivering data electronically to institutions’ back offices and exchanges’ payment systems. This will further automate the give-up process, eliminate duplicate entries in counterparties’ systems and make billing more efficient.
FIA Chairman Richard Berliand, Managing Director, Futures & Options for JPMorgan said: “We are delighted with the remarkable progress that EGUS has made in its first few months of operation. The platform has dramatically reduced the time it takes to execute give-up agreements and has brought greater operational efficiency to the futures and options markets as well as significant cost savings.”
Jeff Gooch, Head of Trade Processing and Valuations at Markit, commented: “This is an exciting initiative for Markit and one which has yielded spectacular results in a short space of time. By streamlining the give-up execution process through the use of technology, we have been able to improve trading relationships in the futures and options marketplace and have automated a once paper-intensive process.”
EGUS is open to all executing and clearing brokers regardless of FIA membership. The FIA, Markit and 19 firms partnered to create EGUS: Banc of America Securities, Barclays Capital, Bear Stearns, Calyon Financial, Citi, Credit Suisse, Deutsche Bank, Fimat Group, Fortis Bank Global Clearing, Goldman Sachs, HSBC, JPMorgan, Lehman Brothers, MF Global, Merrill Lynch, Morgan Stanley, Prudential Bache Commodities, RBS Greenwich Futures, and UBS.
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For more information, please contact:
Markit
Caroline Lumley
Associate, Corporate Communications
Tel: +44 207 260 2047
Email: caroline.lumley@markit.com
FIA
Mary Ann Burns or Will Acworth
Tel: + 1 202 466 5460
Email: maburns@futuresindustry.org / wacworth@futuresindustry.org
About FIA
FIA is the international trade organization for the futures industry. Its membership includes 35 of the largest futures commission merchants. FIA estimates that its members are responsible for more than 90 percent of all public customer business executed on U.S. contract markets.
About Markit
Markit Group Limited (“Markit”) is the leading provider of independent data, portfolio valuations and OTC derivatives trade processing to the global financial markets. The company receives daily data contributions from over 85 dealing firms, and its services are used by almost 1,000 institutions to enhance trading operations, reduce risk and manage compliance.