2014 Solutions Markit Exchange Traded Product The most advanced, comprehensive view of the global ETP market, serving all market participants ETP Multi-Asset Composition Data ETP Encyclopedia ETP Analytics ETP Dividends ETP PCF Service ETP inav Calculations Markit provides the most detailed and complete ETP solution available in the marketplace today. The needs of all ETP market participants are met with the unrivaled content and depth of Markit data and research.
Markit delivers the most advanced, comprehensive view of the global exchange traded product (ETP) market. The Markit ETP product suite aggregates and generates crucial information, including ETP provider details, daily portfolio composition, dividend forecasts and analytical datasets. Our ETP services power trading systems, support market research, simplify risk management and fuel investment strategies.
The number of products and assets under management in the global ETP marketplace are approaching record heights. A dynamic regulatory environment, combined with the increasing complexity of product structures, produce a growing need for operational efficiency and transparency. ETP Multi-Asset Composition Data ETP Encyclopedia ETP Analytics ETP Dividends ETP PCF Service ETP inav Calculations Markit provides a full suite of ETP products and services specifically designed by leading industry experts to meet the needs of all ETP market participants, from ETP issuers and buyside investors to brokers and marketmakers. The depth of our data, combined with flexible delivery options, provide clients with unique visibility into market activity across the global ETP industry. \ 3
ETP Lifecycle Through our comprehensive suite of ETP products and services, we support the complete ETP lifecycle and serve participants across the ETP industry. Issuance Issuers leverage our composition data and analytics for research to support ETP construction. Our PCF service delivers constituent data and a target NAV to market participants, while our inav service provides independent intraday NAV calculation and distribution. Creation and Redemption Authorised participants (APs) use our composition and reference data to determine their obligations, including delivery of underlying assets and fees, for fulfilling creation and redemption orders. Investment Decision Making Daily composition data and derived analytics support research and strategy development. Independent dividend forecasting enables options traders to more accurately price ETP options. Trading In addition to inav calculation and tracking, our composition data enables hedging activities. Our comprehensive reference data supports trading in each fund. Post Trade Our composition data enables daily profit and loss calculations to help meet reporting requirements. Our extensive analytics simplify risk management. \ 4
Methodology The breadth and depth of our content delivers unique insight into the global ETP marketplace. Flexible distribution options support a range of customer needs. Sourcing Consolidation Data organisation Distribution Client utilisation Prospectuses Analyse Classification Web application Research Issuer websites Cleanse Benchmarking Excel add-in Issuance Direct queries Validate Listing and symbology File transfer Trade decision Issuer and custodian trade files Standardise Creations and redemptions Database Risk management Basket constituents API Intraday hedging Pricing Compliance Analytics Enhancing operation efficiency \ 5
Transform your ETP business ETP Multi-Asset Composition Data Markit provides daily creation, redemption and tracking basket information for global ETPs across asset classes. In addition to supporting the calculation and tracking of intraday net asset value (NAV), our composition data indicates what must be delivered to a fund in the event of a creation or redemption order. We also provide daily NAVs on a pershare and per-creation unit basis. Data is provided in a standardised format. Corporate action and management fee impact are normalised within the estimated cash across ETP issuers. All data is processed and validated ahead of the listing s local exchange open. Creation/Redemption Basket of securities and cash authorised to be exchanged for a block of ETP shares Tracking Basket that reflects full portfolio composition and can be used to track intraday NAV, with excluded assets displayed to enable more accurate intraday NAV calculations ETP Encyclopedia The Encyclopedia is a single, centralised source of ETP reference data. It provides normalised and detailed information for every fund listed globally across all asset classes. Data is sourced directly from issuers, prospectuses and exchanges, with all new ETPs and listings added before launch. Our ETP Encyclopedia gives industry participants a mechanism for analysing the topography of the entire ETP landscape, with more than 200 unique data fields managed by our ETP research team. Data fields encompass the following categories: ETP classification system (7 tiers) Stated benchmark information Listing information and symbology Key fund characteristics Detailed management fee and expense information Creation/redemption data Legal structures Collateral Basket reflecting collateral held by a fund provider to satisfy the regulatory requirements of synthetic ETPs \ 6
ETP Analytics Markit provides a comprehensive and independent suite of analytics, comprising performance, exposure, liquidity, risk and tracking metrics for the global ETP market. Analytics are derived from our ETP composition, reference and dividend data. We leverage industry-standard methodologies, enabling customers to select their preferred methodology. Analytical dataset includes: Fund flows and AUM data Performance statistics Liquidity, such as volumes by venue and bidask spread and size ETP to benchmark analysis, such as tracking error and correlation Regression analysis, such as return series Risk analysis, such as beta, alpha and Sharpe/ Sortino/Treynor ratio ETP Dividends Markit delivers complete historical dividend announcements as well as independent forecasts of dividend amounts, payment schedule and announcements, with up to two years of dividend projections. As ETP option and derivative trading continues to grow, traders and risk managers require an accurate source of forecast dividend data. Our dividend forecasts cover 120 of the most liquid US listed ETPs. Information is collected from various sources including exchange filings, ETP providers and our securities finance dataset. Forecasts are based on a range of factors, including: Accrued dividend per share Securities lending revenue Fund management fees Accounting measures for appropriate payment adjustments Consensus forecasts Industry trends \ 7
Transform your ETP business ETP PCF Service Markit provides ETP issuers with a robust calculation service and broad distribution channels. We support the distribution of accurate and timely portfolio composition data by leveraging our established connections to exchanges and APs, many of which are existing Markit clients. In addition to physical and synthetic methodologies, we offer multi-asset class coverage. Constituent data and a target NAV are delivered to the requested market participants hours before the start of daily trading. Our calculation and distribution services provide: Corporate action adjustments off official index methodology ETP inav Calculations As a global leader in daily and intraday pricing across multiple asset classes, Markit provides the calculation expertise and reference data capabilities to calculate any ETP inav. From plain vanilla equities to hard to value loan portfolios, we have the experience and resources to meet our customers requirements. Our inav calculation service aggregates pricing and reference data to run the calculations. It also provides connectivity to venues, such as exchanges and data vendors, to support distribution requirements. Calculation of a total and estimated cash component Incorporated cash dividends, adjusted for daily management fee impact Distribution via our standardised, consolidated XML feed or flat file and email options that meet stock exchange specifications \ 8
Related products Markit Index Management The Markit Index Management service collates and provides official data on equity indices in a single feed. Data is sourced directly from index providers and exchanges, and is checked and validated ahead of market open. Markit iboxx Markit iboxx cash bond indices are designed to replicate investible investment grade and high yield fixed income markets. Markit Reference Data Markit supports the credit derivative, bond, equity, syndicated loan and legal entity data needs of the financial markets. Our broad range of reference data is specifically designed to facilitate securities trading, settlement, risk management and back-office functions, including accounting and client reporting. Markit Evaluated Bonds Markit provides robust coverage across bonds, CDS and loans pricing, as well as equity volatility data and securities lending data for stocks and bonds We offer full transparency into our valuations methodology and inputs and apply rigorous cleaning algorithms to our data to ensure quality. Markit Factors Markit delivers valuable investment insights through a comprehensive library of global stock selection and strategy signals. Markit Factors covers more than 30,000 securities across 80 countries Markit Transaction Cost Analysis Markit Transaction Cost Analysis (TCA) is an independent global equity and FX trading analysis platform for buyside and sellside firms. It combines execution, algorithmic, venue and smart order router evaluation analytics. \ 9
5,200+ ETPs currently traded 3,300+ indices tracked 150+ clients These numbers are changing as you read this. \ 10
About Markit More Information Markit is a leading, global financial information services company with over 3,000 employees. The company provides independent data, valuations and trade processing across all asset classes in order to enhance transparency, reduce risk and improve operational efficiency. Its client base includes the most significant institutional participants in the financial marketplace. For more information on the products and services from Markit, please contact us at sales@markit.com or call one of our regional offices: London +44 20 7260 2000 New York +1 212 931 4900 Amsterdam +31 20 50 25 800 Boulder +1 303 417 9999 Dallas +1 972 560 4420 Frankfurt +49 69 299 868 100 Hong Kong +852 3478 3948 Tokyo +81 3 6402 0130 Toronto +1 416 777 4485 Singapore +65 6922 4200 Sydney +61 2 8076 1100 markit.com \ 11
mines data, pools intelligence, surfaces information, enables transparency, builds platforms, provides access, extends networks, & transforms business. Markit makes no warranty, expressed or implied, as to accuracy, completeness or timeliness, or as to the results to be obtained by recipients of the products and services described herein, and shall not in any way be liable for any inaccuracies, errors or omissions herein. Copyright 2014, Markit Group Limited. All rights reserved. Any unauthorised use, disclosure, reproduction or dissemination, in full or in part, in any media or by any means, without the prior written permission of Markit Group Limited is strictly prohibited. 01/23/2014