The International Swaps and Derivatives Association (ISDA) and law firm Linklaters have made the ISDA master agreement digitally available for the first time via ISDA Create.
The trade body for over-the-counter derivatives market participants says that the move will bring greater efficiency, transparency and automation to the negotiation process and enable firms to capture key relationship data for risk management and other purposes.
ISDA Create allows users to produce and agree documentation completely online, as well as digitally catch, process and store legal data from these documents.
As part of the rollout, the ISDA clause library, which provides standardised drafting options for certain provisions within the ISDA master agreement, is also being added to the platform.
The inclusion of the ISDA clause library will introduce greater standardisation in how firms negotiate and agree provisions when negotiating a master agreement, making contract negotiation more efficient and improving the consistency and accuracy of legal agreement data.
The clause library will be updated over time to reflect changes to market and legal practices, and these changes will be added to ISDA Create, the association says.
The intended outcome of this implementation is a broader initiative by ISDA to standardise and digitise its definitions and legal documentation, and to enable that data to flow directly through to trading, operational and risk management systems in a consistent way.
ISDA explains that this will enable firms to access a golden source of data in a digital format will support automation, drive efficiency and reduce costs for market participants.
Katherine Tew Darras, general counsel at ISDA, says: “More than 30 years ago, the launch of the ISDA master agreement brought greater standardisation and efficiency to the derivatives market. We’re now taking another big step towards improved efficiency by digitising this foundational document.”
Darras adds that bringing the master agreement and clause library into ISDA Create means can, “for the first time, negotiate the various provisions of this agreement online and electronically consume the resultant legal data automatically”.
Doug Donahue, partner at Linklaters, describes the move as an opportunity to “continue to transform our industry through technology” adding that the digital clause library will bring ‘the opportunity technology presents into clear focus”.
Elsewhere, ISDA spoke to SFT about its plans to amend its master agreement to make it more accessible to securities financing transactions.
In a recent whitepaper — Collaboration and Standardisation Opportunities in Derivatives and SFT Markets — the trade body proposes a set of SFT-related provisions to be added to the schedule of the ISDA master agreement, along with the publication of an SFT definitional booklet.
