Focus On: Operations
Measuring Operational Risk: Part Science, Part Art | Licensing Ops Execs: Great Idea, Bad Execution? | Reducing Operational Errors With OTC Derivatives | A DAY IN THE BACK OFFICE:
Eliminating Operational Risk at a Transfer Agency | Giving a Single Name a Single Identity | TOP OPS EXEC: Timothy Doar, CME Clearing | TOP OPS EXEC: Mike Fish, SWIFT | TOP OPS EXEC: Patrick Kirby, DTCC | TOP OPS EXEC: John McCorvey, Gar Wood Securities | TOP OPS EXEC: Jeff Gooch, MarkitServ | TOP OPS EXEC: James Malgieri, BNY Mellon | TOP OPS EXEC: Hans Hufschmid, GlobeOp Financial Services | TOP OPS EXEC: Conrad Kozak, JPMorgan Chase
TOP OPS EXEC: Jeff Gooch, MarkitServ
May 4, 2011
NAME: Jeff Gooch
KEY FOCUS: Build a platform to manage all post-trade requirements of OTC derivative transactions including connec- tivity to all clearing houses.
In the aftermath of the passage of the Dodd-Frank bill, change and uncertainty have become watch- words for the over-the-counter deriva- tives business as it remains unclear how yet-to-be-implemented regulations will work – or work out.
However, Jeff Gooch, CEO of MarkitServ – a one-stop shop for the processing derivative transactions – has taken it all in stride. He attributes his ability to cope with the current business environment to two things – Morgan Stanley and stunt motor-biking. His experience at Morgan Stanley – where he worked for eleven years, rising to managing director and global head of fixed income operations – is relevant, Gooch says.
That’s because the firm’s derivatives operations is one of the largest such businesses on Wall Street. “I worked with many of the par- ticipants in the derivatives markets at Morgan Stanley and was one of the original customers of the two firms that formed and now jointly own MarkitServ – Markit, an independent source of de- rivatives pricing, indexes and valuations and The Depository Trust & Clearing Corporation (DTCC) – and so I feel confident that I understand many of the current problems and concerns of our customers,” he said.
In addition, when Gooch was a child, his father ran a stunt motorcycle show and frequent attendance at these events was an invaluable experience, Gooch noted. These prepared him for the regulatory uncertainty and growing competition in the present day deriva- tives market.
“I learned quickly as a child at stunt motorbike events that the expectations of one’s audience and in turn, the world, constantly changes and you have to always keep your mind open to new pos- sibilities,” Gooch said.
MarkitServ counts more than 70 dealers, 50 inter-dealer brokers and nearly 2,000 buy-side institutions, includ- ing hedge funds, pension funds and insur- ance companies, as customers. And it is developing new products and services for them, even as rules change, that have been top of mind for CEO Gooch.
Last year, a major focus for MarkitServ was helping the industry prepare for requirements to centrally clear certain derivative transactions. MarkitServ now connects to each of the six CCP’s globally that currently accept trades, including: LCH.Clearnet, The CME Group, ICE Trust, Eurex Clearing, the International Derivatives Clearing Group and the Singapore Exchange.
“When we launched MarkitServ in 2009, we made a big splash, talking about
being a neutral platform that would offer connections to all the clearing houses; I feel better now that we have actually built out that connectivity,” Gooch said, noting that the task was challenging to complete, as every clearing house has a different business model, employs its own technology, clears its own unique set of asset classes and serves its own set of user groups.
In October of 2010, MarkitServ announced that it had linked its clearing house routing system to BlackRock’s ser- vices business – BlackRock Solutions – which maintains upwards of $9 trillion of trading positions for its clients through its Aladdin portfolio management tool. As a result, users of the Aladdin plat- form can now easily access MarkitServ’s functionality in the processing of OTC derivatives. This includes the ability to electronically confirm OTC derivatives trades, allocate block trades among sev- eral accounts, novate or change counter- parties in CDS and IRS trades and direct eligible trades for central clearing.