FIA and Markit in give-up venture

A global electronic give-up agreement system – enabling brokers, clearing brokers and their customers to execute such agreements online – has been launched in a collaborative venture between Washington-based Futures Industry Association (FIA) and London-based price information service Markit.

The electronic system is expected to be available to futures market participants in February 2007 and is designed to reduce execution costs by removing the need for paper-based documentation.

Risk News has learnt that the roll-out of the platform will have a second phase which will link the service with major exchanges, including the New York Stock Exchange, Euronext, Chicago Mercantile Exchange and Chicago Board of Trade.

“The service will significantly reduce the cost and the time it takes to establish give-up agreements for both customers and brokers,” said Richard Berliand, chairman of the FIA, who is a managing director, futures and options at JP Morgan. “The feedback from both the industry and the customers has been extremely positive.”

Banc of America Securities, Barclays Capital, Bear Stearns, Calyon Financial, Citigroup, Credit Suisse, Deutsche Bank, Fimat Group, Goldman Sachs, JP Morgan, Lehman Brothers, Man Financial, Merrill Lynch, Morgan Stanley and UBS have all pledged to support funding of the system.

Data will be delivered electronically to exchanges, clearing houses and customer systems, streamlining execution brokerage practices. The platform will be open to all executing and clearing brokers, including non-FIA members.