Markit and BNY Mellon have teamed up to offer securities level data and pricing points in US dollar tri-party repo market. Markit already has an offering on the US$2trn stock lending sector while BNY Mellon Broker Services dominates the US$1trn dollar repo tri-partite market with an 80% market share.

The new product consists of security level data, built up from transactional information and covers various aggregated data with standard collateral categories, including Treasuries, ABS and corporate bonds.

There will be a beta trial over the next few weeks so clients can get to grips with the data, published two days after the transaction date. The full launch should happen in early May.

Collateral Crunch
Additional transparency generated by the new service could prove a vital part of the solution to an impending collateral crunch that looms as much of the US$639trn OTC derivatives completes the shift into central clearing.

Repo and collateral transformation are likely to be key markets in meeting some of the shortfall and more timely trade data that will be made available by the new venture should help boost transparency and potentially expand the use of repo as a collateral transformation tool.

There is very little transparency in repo at present. This new product will help show what collateral is available and what the rate should be. The development also helps align BNY Mellon with the regulatory backdrop, Fed initiatives and the potential market opportunity from increased transparency.