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Tech to make derivatives trading more efficient

McCann FitzGerald LLP says that it has become the first local Irish law firm to be certified in new technology aimed at helping traders in derivatives to move from paper-based to electronic documentation.

Derivatives are financial instruments linked to a specific indicator or commodity, through which specific financial risks can be traded in financial markets.

The tool, developed by the International Swaps and Derivatives Association (ISDA) in collaboration with Linklaters, has applications for many participants in the Irish derivatives market.

McCann FitzGerald has been certified as a partner in the ISDA programme.

Documentation

The firm says that the new technology can “substantially reduce” the complexity and timeframes involved in documenting derivatives.

It enables the electronic generation, negotiation and execution of derivatives documentation, and the electronic capture of legal and commercial data from that documentation by trading, operational and risk-management systems.

Users can allow external advisors — including those certified through the ISDA initiative — to draft and negotiate documents on their behalf and monitor the progress of negotiations through the platform.

Transparency

“The comprehensive audit trail of user activity, approvals and negotiation history available through the ISDA Create platform also offers significant transparency and governance benefits,” McCann FitzGerald says.

Judith Lawless (partner and head of McCann FitzGerald’s derivatives practice, pictured) said: “The world is moving on from paper-based legal documentation, and I’m delighted we can support our clients using the latest advancements in technology to enable more efficient negotiations, for even the most complex of cases.”
 
She added that electronic generation and electronic negotiation would be “a game-changer” in how the industry worked.