The challenge

A leading European bank (‘the client’) needed to extract key terms from Netting Summary documents, across 60+ jurisdictions. Many banks struggle to understand whether they are entitled to net trades in the derivative market. This forces institutions to make expensive decisions in terms of RWA. Providing systematic netting data to a wide range of stakeholders is a widespread problem, and one which the client was faced with.

Our response

We built a “Golden Source” of netting data, which mapped these summaries to the underlying master agreement and generated reports on netting applicability, covering the below scope and delivering the below outcomes:

Business outcomes

• Provided a completed view of netting viability by counterparty and product for each jurisdiction by collecting data across counterparty type, in scope transactions and all netting carve outs.

• Enabled the bank to assess if ISDAs had following recommendations of Netting.

• Summaries by linking Netting Summaries to their related ISDA Master agreements.

• Straight through processing for future updates by creating a template for Netting Summaries.

• Established Business as usual (“BAU”) service to manage updates to netting opinions and their summary sheets to ensure all users have the most up to date information across CSA, Repos, Sec Lending etc covering all 120 jurisdictions.

Technical outcomes

• Rapidly created and customised the data model by adding new terms, attributes and enumerations without product development.

• Managed data model enhancements without impacting previously captured data.

• All new clauses that were identified in the system were automatically added to the Clause Library for reuse.

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