Linklaters partners with ISDA to unveil automation tool for financial institutions

Linklaters and The International Swaps and Derivatives Association, Inc. (ISDA) have launched the beta version of a new online tool that will allow financial firms to deal with new regulatory requirements – in the first major collaboration between a global law firm and a global trade association in the creation of a online negotiation platform.

The online tool, called ISDA Create-IM, will allow banks and financial institutions to electronically create, negotiate and execute initial margin (IM) documentation as the universe of market participants subject to such requirements grows exponentially over the next two years.

ISDA Create – IM users will have a tool that will enable them to produce, deliver, negotiate and execute IM documents with multiple counterparties simultaneously. It will also allow firms to digitally capture, process and store the resulting data, which can be used for commercial, risk management and resource management purposes. The online functionality will make the negotiation process more efficient and less time-consuming.  ISDA Create – IM is expected to reduce the overall time and cost of these negotiations by 50% or more.

Doug Donahue, Derivatives partner at Linklaters, says:

“The development and launch of this tool is a critical step for our industry as we all look to leverage efficiencies enabled by technology. Bringing together an unprecedented amount of industry input from the most active sell-side and buy-side participants in the market, we have built something that really is driven by their needs. It’s a great example of what can be achieved when you combine the innovative thinking of the market, lawyers and developers.” 

Katherine Tew Darras, ISDA’s General Counsel, says:

“Negotiating IM documentation typically takes significant time and resource, and has to be repeated over and over again with each counterparty. ISDA Create – IM will drastically improve the efficiency of this process, enabling parties to deliver a document to multiple parties at the same time, and then to negotiate changes on a bilateral basis using the platform.
The beta version of ISDA Create – IM will be followed by the rollout of a live version early in 2019.

The technology that drives the tool is designed by Nakhoda, Linklaters’ flagship technology and AI platform. Its intelligent design is based around converting linguistic legal data into an enabler for rapid and informed decision-making. It is guided by a sharp focus on fusing emerging technologies with deep legal expertise.

Partha Mudgil, COO of Nakhoda at Linklaters, says:

“This Initial Margin tool is an example of how we are using our legal knowledge to identify opportunities for automation and to design a bespoke and transformative product that helps drive efficiencies and enable data-based insights for our clients. But it also shows how the relationship between lawyers and clients is changing. We are no longer seen as ‘black-ink’ advisers, instead, working in partnership, we’re able to pull together the brightest minds to create and deliver solutions that will have real and practical results for the market.”