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Netting manifesto: Difference between revisions
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*'''Arbitrary gaps''': There are arbitrary caps in coverage. A significant portion of our counterparties are not covered by industry opinions and require bespoke opinions | *'''Arbitrary gaps''': There are arbitrary caps in coverage. A significant portion of our counterparties are not covered by industry opinions and require bespoke opinions | ||
*'''Incomprehensible''': The opinons are long, verbose, and do not summarise of provide clear guidance, such that there are third-party services (e.g. AOSphere) designed to aid the interpretation and codification of opinions, and even these are inadequate, requiring additional internal interpretation. | *'''Incomprehensible''': The opinons are long, verbose, and do not summarise of provide clear guidance, such that there are third-party services (e.g. AOSphere) designed to aid the interpretation and codification of opinions, and even these are inadequate, requiring additional internal interpretation. | ||
*'''Supplemental opinions''': As a result | *'''Supplemental opinions''': As a result institutions must get additional custom opinions for entity types, jurisdictions and agreement types not covered by every industry opinion. | ||
Several industry associations independently carry out opinion gathering regimes at great expense on behalf of their memberships. The majority membership of all of these industry associations is common. The brokers have delegated the business of arranging for netting opinions to the industry associations and been largely passive in how it has been carried out. This has benefited the associations themselves, and the global law firms, but not the brokers. All of these brokers are paying for effectively the same service six or seven times, and then incurring further cost to understand what they have paid for, because those seven exercises are not done very well. | Several [[industry association|industry associations]] independently carry out opinion gathering regimes at great expense on behalf of their memberships. The majority membership of all of these industry associations is common. The brokers have delegated the business of arranging for netting opinions to the industry associations and been largely passive in how it has been carried out. This has benefited the associations themselves, and the global law firms, but not the brokers. All of these brokers are paying for effectively the same service six or seven times, and then incurring further cost to understand what they have paid for, because those seven exercises are not done very well. | ||
The industry needs clear, binary netting signals, itemised for standard counterparty types, rendered consistently across agreement formats, ideally in a machine-readable form. | The industry needs clear, binary netting signals, itemised for standard counterparty types, rendered consistently across agreement formats, ideally in a machine-readable form. | ||