Easily manage the workflow and processing of novation trades in a timely manner while adhering to industry defined business standards.
A novation replaces the original party with a new one. When a contract is novated, the remaining party must be left in the same position as was prior to the novation being executed. A novation requires the agreement of all three counterparties involved. The incoming party and the outgoing party agree to novation fee details, while the remaining party should agree to face the new incoming counterparty.
MarkitSERV Services
The MarkitWire novation process combines consent and documentation into one easy action, and fully complies with the ISDA Novation ProtocolSM . There is no need for a separate email-based consent process when trades are electronically completed on MarkitWire.
Features
simple and easy to use
real-time platform allows immediate three-way communication
full details of original confirmation are automatically included
consent and legal confirmation completed in a single step
For interest rate and equity derivatives, the outgoing party selects an existing trade and presses the “Novate” button. A fee can be entered and the novation request is sent instantly via MarkitWire to the incoming and remaining party trading desks. The fee details are not shown to the remaining party.
Each party signals its agreement by pressing the “Affirm” button. All three parties are notified when tri-lateral agreement has been achieved. A new trade record with its own unique identifier is created for the novation agreement and the trade is available to the counterparties. The new trade record also references the original trade record and all of the trade details. The original trade record is marked as Novated.
MarkitSERV Credit Novation Consent
Credit Novation Consent automates the request, approval and notification procedures among the three parties involved in an OTC credit derivative contract assignment/novation, as stipulated by the International Swaps and Derivatives Association (ISDA®) in its Novation Protocol.
Specific instruments covered by Credit Novation Consent include all credit products currently supported by MarkitSERV and the DTCC Trade Information Warehouse: single-reference-entity credit default swaps (CDS) — including corporates, sovereigns, loans, asset-backed and mortgage-backed instruments — indices and tranches.
MarkitSERV Trade Manager
Trade Manager offers pre-confirmation support for novation consent. It allows buy-side firms to connect to the MarkitSERV Novation Consent service to submit and track electronic consent updates in real time.
