Institutions face ever increasing pressures to ensure that the documentation on which they rely is a) in good order and b) accurately recorded in their systems. These pressures arise both internally from key risk and trading areas that rely on accurate legal contract data in order to manage risk and transact profitabl. Furthermore, externally they arise from regulators who themselves are under pressure to ensure that markets are properly supervised and that any potential shocks are avoided such as those from the collapse of Lehman Brothers in 2008. This has led to regulations such as BCBS 239.
D2LT has run a number of assignments to help institutions to review and organise their documentation and their data to be able to meet these pressures more effectively. The assignments have ranged from technology-assisted data extraction exercises to legal opinion review projects to ensure that relevant netting opinions were in place in support of master trading agreements.
Netting of exposures is key to the use of these types of agreements and when used properly frees up trading limits, reduces exposure and collateral requirements and can significantly reduce regulatory capital requirements. Our experience in these areas is second to none.