Articles by author
The “digital” answer is always netting …
The co-architect of the design and drafting of the modern form of master trading agreements, such as the Global Master Securities Lending Agreement (GMSLA), Global Master Repurchase Agreement (GMRA) and ISDA Master Agreement, Jeffrey Golden KC (Hon), once stated that "the answer is always netting". The continuing force of the statement lies in netting's central role in both counterparty credit risk mitigation and financial stability. However, the effectiveness and enforceability of netting under these master trading agreements have come to depend on legal opinions intended to confirm enforceability.
Yet, 40 years after the capital markets industry started to utilise these legal opinions for this purpose, very little has changed in how they are produced or operationalised. Legal opinion practice in the financial markets has not kept pace with the complexity of modern trading relationships, evolving regulatory requirements, or the increasing role of technology and the digital agenda. Prudential regulators and supervisory bodies, including the Federal Reserve, the Prudential Regulation Authority, the European Central Bank and the Australian Prudential Regulation Authority, have responded with enforcement action where supervised firms have taken regulatory capital relief without adequate processes, systems and controls in place. The answer remains netting, but it starts with a more digital and data-driven approach to counterparty due diligence, anchored in the Legal Entity Identifier (LEI). This article explains why the LEI is essential to ensuring that netting remains the ultimate solution.
“Sailing into the rules of smart contracts...”
In this Spotlight article, the authors consider the significance of Lord Justice Lopes’ judgment in The Satanita [1897] AC 59 to shaping development and innovation in contracting through smart contracts.
1 JUN 2021Offer and acceptance … and sailing into the terms of decentralised networks
In this article, Akber Datoo explains how English contract law can provide useful, flexible tools to simplify and clarify the fundamental legal relationships between participants in decentralised networks.
1 JAN 2024
