Markit

Markit was a London-based financial information services company founded in 2003 that provided pricing, valuation, and data solutions to institutions across global markets. It operated in credit, derivatives, securities, and commodities and served clients including banks, asset managers, insurers, and exchanges. The firm became notable for electronic trade processing, indices, and reference data before its merger into larger information conglomerates.

History

Markit originated in the early 2000s amid rapid growth in over-the-counter derivatives and efforts to improve transparency in markets such as credit default swaps, interest rate swaps, and mortgage-backed securities. Founders created services to address deficiencies highlighted by events like the 2007–2008 financial crisis and regulatory responses epitomized by reforms tied to the Dodd–Frank Wall Street Reform and Consumer Protection Act. The company expanded via acquisitions and partnerships with institutions including Deutsche Bank, JPMorgan Chase, Citigroup, and Goldman Sachs. In 2016 Markit combined with IHS Inc. to form IHS Markit, a move compared to other consolidations involving Thomson Reuters and Bloomberg L.P.. Subsequent corporate transactions culminated in a 2020 agreement with S&P Global, aligning the firm with entities such as McGraw Hill Financial and reshaping competitive dynamics with Refinitiv and FactSet.

Products and Services

Markit's offerings encompassed pricing services, valuation feeds, indices, and trade processing platforms used by participants in fixed-income markets, foreign exchange desks, and equity derivatives teams. Prominent products included daily valuations used in collateral management and settlement workflows for clients like BlackRock, Vanguard, State Street, and BNP Paribas. The company managed benchmark indices comparable to offerings from MSCI, FTSE Russell, and S&P Dow Jones Indices while providing reference data akin to Morningstar datasets. Technology services integrated with trading venues such as CME Group, Intercontinental Exchange, and Nasdaq and linked to clearinghouses including LCH Limited and DTCC. Markit's platforms interfaced with risk systems from Moody's Analytics and Fitch Solutions and compliance tools used by European Securities and Markets Authority stakeholders and Financial Conduct Authority units.

Market Role and Impact

Markit played a systemic role in market infrastructure by supplying standardized pricing and reducing informational frictions among market makers like UBS, Credit Suisse, and Barclays. Its services supported valuation practices at insurers such as AXA and Allianz and pension funds including NEST and CalPERS. By offering consensus data for instruments traded by hedge funds like Bridgewater Associates and proprietary desks at Morgan Stanley, the company influenced liquidity provision on platforms operated by Tradeweb and Liquidnet. Regulators and central banks including the Federal Reserve System and the Bank of England used aggregated data to monitor conditions in markets akin to how institutions rely on data from Euroclear and SWIFT.

Corporate Structure and Ownership

Markit's corporate governance involved a board with executives drawn from finance and technology sectors, aligning with investors such as private equity firms and strategic backers similar to KKR and Silver Lake Partners. The merger with IHS Inc. created a combined entity with cross-jurisdictional regulatory footprints in United States and United Kingdom markets and reporting obligations to agencies like the Securities and Exchange Commission and Commodity Futures Trading Commission. The later acquisition by S&P Global placed businesses alongside divisions from S&P Dow Jones Indices and S&P Global Platts, integrating workflows with multinational clients and counterparties including Temasek Holdings and Blackstone in certain asset servicing arrangements.

Controversies and Legal Issues

Markit's activities intersected with litigation and regulatory scrutiny concerning benchmark administration and transparency in opaque markets. High-profile debates around valuation methodologies involved comparisons with practices scrutinized in cases related to Lehman Brothers and disputes involving Royal Bank of Scotland. The role of data providers in price discovery drew attention from bodies such as the Department of Justice and European Commission in investigations of market conduct resembling inquiries that affected Libor and EURIBOR benchmark litigation. Class actions and contractual disputes occasionally named information vendors alongside major dealers like Deutsche Bank and Morgan Stanley over valuation outcomes for structured products and collateralized debt obligations.

See also

IHS Markit S&P Global Bloomberg L.P. Refinitiv FactSet CME Group Intercontinental Exchange Nasdaq DTCC LCH Limited Deutsche Bank JPMorgan Chase Goldman Sachs UBS Credit Suisse Barclays BNP Paribas BlackRock Vanguard State Street Moody's Analytics Fitch Solutions MSCI FTSE Russell S&P Dow Jones Indices Morningstar Tradeweb Liquidnet Bridgewater Associates Morgan Stanley Lehman Brothers Royal Bank of Scotland KKR Silver Lake Partners Temasek Holdings Blackstone European Commission Department of Justice Securities and Exchange Commission Commodity Futures Trading Commission Federal Reserve System Bank of England AXA Allianz CalPERS NEST Collateralized debt obligation Libor EURIBOR 2007–2008 financial crisis Dodd–Frank Wall Street Reform and Consumer Protection Act United Kingdom United States London Iain MacDonald