Cygnifi, the online derivatives agency established by J P Morgan, has signed Merrill Lynch and J P Morgan Chase as clients for Trinity, a legal risk management tool developed in partnership with London law firm Allen & Overy.
Merrill and J P Morgan Chase are planning to apply Trinity to the analysis of the legal risks of collateralising derivatives in multiple jurisdictions.
Trinity provides online access to legal research built up over several years and updated recently, says Cygnifi. It provides tools to analyse the legal risk associated with an existing collateralised credit portfolio, and instant access to legal research to ensure that derivative traders are no longer prevented from taking collateral in a new market due to a lack of inhouse research.
"Cygnifi's Trinity service provides easy access to legal analysis in familiar and unfamiliar jurisdictions", says Michael Clarke, Cygnifi's head of collateral management. He says a subscriber to Trinity can find detailed information about perfecting a security interest in German government bonds located in Belgium one day, and insight about the issues of enforcing a collateral agreement against an insolvent Korean counterparty the next.
Locke McMurray, director and senior counsel at Merrill Lynch says Cygnifi's partnerships with local and international law firms was a deciding factor in choosing the service. Trinity currently operates an international network of affiliate legal partners in 21 jurisdiction, with plans to eventually cover the laws of over 50 jurisdictions.
"The Trinity ASP model solves many of the cost and efficiency problems typically associated with maintaining up-to-date, top quality legal analysis on collateral," says Diane Genova, managing director and associate general counsel at J P Morgan Chase. "Trinity adds great value for us by facilitating more collateralised derivative business with more clients in more jurisdictions - with less credit risk and less legal risk."