Investment Operations

ISLA Addresses Securities Lending Digitization

Digital Asset Custody and Servicing

The International Securities Lending Association (ISLA), has confirmed the publication of ‘Legal Clause Library & Legal Data Standards‘, a white paper produced in association with D2 Legal Technology (D2LT).

Documentation plays a crucial part in the securities lending industry, creating a set of obligations between the contracting parties and recording the terms of their transactions and relationship, says ISLA. Accordingly, any successful digital transformation requires a focus on documentation. The trade group has therefore mobilized a clause library and taxonomy project in respect of the GMSLA documentation suite.

The ‘Legal Clause Library & Legal Data Standards‘ white paper focuses on digital data standards created by the clause library and taxonomy project through a look at the key aspects of the securities lending industry:

  • how the industry is positioned today;
  • a vision for what the strategic state looks like;
  • the steps required to achieve this strategic state;
  • how best to achieve adoption across the industry; and 
  • immediate next steps. 

It concludes that in an increasingly data-driven world, firms are moving to operationalise their business through automating data-driven processes, allowing greater efficiency, scalability, and resilience through the medium of data. Key to this, according to the paper, is the representation of contractual terms and the expression of business outcomes that they represent in a manner that follows a consistent, predictable and structured data format.

“The work we are doing with D2LT sits at the heart of our digital agenda,” said Andrew Dyson, CEO, ISLA. “This latest white paper puts this work in perspective, and sets a clear direction of travel for the industry as we look to maximize the use of this technology for our membership and wider industry stakeholder communities,” Dyson added.

According to D2LT, it is just over twenty years since the publication of the GMSLA documentation, which has been instrumental as a foundation to the securities lending industry.  “The GMSLA Clause Taxonomy and Library initiative ISLA is undertaking this year seeks to digitize this agreement and will be a catalyst to unlock multiple business benefits for market participants by ensuring the documentation is connected to resource optimization, risk mitigation, regulatory reporting and operational management of business processes through the medium of structured data,” said Akber Datoo, CEO, D2LT. “This D2LT and ISLA whitepaper sets out the role of the document digitization work within ISLA’s wider bold and exciting vision for the future of the industry,” Datoo added.

To download the publication, please click here.