ISLA has launched a Clause Library & Taxonomy to improve negotiation efficiency in securities lending, supporting standardization and smart contract development.
LONDON, Monday 20 September 2021 – The International Securities Lending Association (ISLA), a leading industry trade association representing the common interests of securities lending and financing market participants across EMEA, is delighted to announce the launch of the ISLA Clause Library & Taxonomy.
In conjunction with our partners D2 Legal Technology (D2LT), and in close collaboration with our members, the ISLA Clause Library & Taxonomy represents a significant effort and input from our membership over the past year and we thank all of those members who have actively participated in contributing to the delivery of the ISLA Clause Library & Taxonomy.
The ISLA Clause Library & Taxonomy is the result of one year of working group meetings, the purpose of which was to identify for each of the 2000 Global Master Securities Lending Agreements (GMSLA), the 2010 GMSLA and the 2018 Security Interest over Collateral GMSLA, how members configure and add to the standard provisions of the preprint documents when negotiating them. Each amendment or addition to the proforma schedule was categorised based upon the business outcome rather than the wording used, and for each business outcome a model clause wording was defined.
The intention is that the ISLA Clause Library & Taxonomy is a living document and will develop with the market as new clauses, variants or variables are utilised by members.
The purpose of the ISLA Clause Library & Taxonomy is not to restrict the ability of members to negotiate freely and draft to achieve the desired mutual outcome, but facilitate more efficient negotiations by providing a number of standardised outcomes and drafting to achieve those outcomes.
Access to the ISLA Clause Library & Taxonomy content is available for download from today (terms and conditions apply).
Future ISLA Clause Library & Taxonomy working group meetings will recommence in 2022, and will follow the prioritisation of work items by members in the ISLA Digital Steering Group.
“Respondents to our recent legal survey overwhelmingly supported the idea of developing an integrated Clause Library that would support standardisation across the industry and pave the way for broader digitalisation and the creation of smart contracts. The release of the ISLA Clause Library & Taxonomy is the first step along that path that will progressively align business, operational and legal outcomes in a combined cross-market Common Domain Model framework.”, said Andy Dyson, CEO, ISLA.
“The Clause Library & Taxonomy work kicked off during my tenure as chair of the ISLA Legal Steering group. It was one of the action points from the ISLA Legal survey and it is great to see it come to fruition. I would like to thank all the members of the Clause Library working group for contributing their time and sample documents / terms to the project.”, said Jamie Pullen, Former Chair of the ISLA Legal Steering Working Group.
Akber Datoo, CEO, D2LT, concludes: “We are delighted to have been able to support and collaborate with ISLA in developing the ISLA Clause Library & Taxonomy. It is a a key step in the digitisation journey, providing market participants with a more efficient approach to contracting, and opportunities to unlock business value through linking contract terms to business outcomes. The ISLA Clause Library & Taxonomy provides the platform for new efficiencies, allowing institutions to optimise resources such as capital, collateral and liquidity and through legal agreement data.”
For further information on the ISLA Clause Library & Taxonomy, please refer to the following links and materials:
The article discusses the launch of ISLA's Clause Library & Taxonomy to enhance negotiation efficiency in securities lending.
It standardizes negotiation processes and supports the development of smart contracts, aligning business and legal outcomes.
ISLA collaborated with D2 Legal Technology and its members to develop the Clause Library & Taxonomy.
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