The International Securities Lending Association (ISLA) has launched a new working group focused on digitising the Global Master Securities Lending Agreement (GMSLA).
Known as the ISLA Document Digitisation Working Group, this ISLA stream will concentrate initially on integrating business outcomes from the Association’s Clause Library and Taxonomy into the Common Domain Model (CDM).
This group will also define modelling principles for representing legal clauses digitally, enabling future clauses and business outcomes to be added to this digital taxonomy.
Led by D2 Legal Technology’s (D2LT’s) founder and chief executive Akber Datoo, the working group will begin its activities this month. D2LT previously worked with ISLA in guiding standardisation of industry-negotiated securities lending trade documentation, including the GMSLA, and on the release in September 2021 of the ISLA Clause Library and Taxonomy.
D2LT has also been working with the International Capital Markets Association (ICMA) on standardisation of industry-negotiated repo documentation, including the General Master Repo Agreement (GMRA), and on the October 2021 release of the GMRA Clause Library and Taxonomy.
Commenting on the launch of the ISLA Document Digitisation Working Group, Datoo says: “The efforts of this working group are imperative to move from the creation of a legal agreement data standard for the GMSLA, to unlocking business value through the digital agenda by giving meaning to GMSLA documentation from the lens of capital, liquidity, risk, collateral and operations. This is the key step before we can benefit from automation and digitisation.”
ISLA director of market infrastructure and technology David Shone, says “By bringing the CDM and the ISLA Clause Library & Taxonomy together, there is an opportunity to introduce benefits greater than the sum of the parts.”
Shone indicates that it is time to combine these foundations together to provide an industry-accepted and standardised methodology, representing smart contracts and enabling the securities lending industry to automate, digitise, and meet its future needs head on. “This is the intention for this new ISLA working group,” adds Shone.
Smart Communications and Broadridge are the first two firms to become members of the ISLA Digital Documentation Working Group.
Mike Lambert, securities lending product director at Broadridge Financial Solutions, says: “Broadridge is excited to work with the team to help accelerate this digitisation transformation which will benefit the industry. This is a great opportunity to incorporate the work done on the Clause Library and Taxonomy with the ground breaking work done on the CDM.”
On 31 October, ISLA released a white paper in collaboration with Linklaters, The Future of the Securities Lending Market: On the Cusp of Transformation, that highlights future priorities across the securities lending transaction lifecycle to guide the industry’s continuing moves towards digital transformation and straight-through process flow.
This white paper builds on ideas mapped out in a September 2019 paper, The Future of the Securities Lending Market: an Agenda for Change, which set out an aspirational agenda to guide the digital future for the industry.
