A new consortium with a focus on General-purpose Legal Mark-up Language (GLML) has been created to facilitate automation in financial markets.
GLML is a significant technology development for financial markets as it can be read by both machines and humans and can be easily applied to any form of financial product documentation. Importantly, GLML is open source and, with the support of the Consortium, will facilitate automation in financial markets and address many of the inefficiencies that currently exist.
International law firms Allen & Overy LLP, Clifford Chance LLP, and Linklaters LLP and one other prominent US law firm are founding members of the consortium, together with Nivaura, a regulated fintech company focused on primary market digitisation and automation.
Currently, a typical capital markets execution is a linear and sequential process using multiple intermediaries that are required to repeatedly convey information back and forth in order to draft and execute legal documents. This requires significant resource. The processes that occur after the drafting of relevant documentation, such as clearing and record-keeping, are also manual and time consuming, with parties having to manually review documents to pull out necessary pieces of information to input into their systems.
Phil Smith, Chair of the GLML Consortium and a former capital markets partner at Allen & Overy commented that “a current challenge in transactions is that the myriad of information and communication channels means people spend more time then they need to on manual tasks. Technologies that streamline communications and the input of data into transactions and which reduce manual touchpoints should be very beneficial”.
GLML is the means by which such technology can work.
Richard Cohen, Nivaura’s General Counsel and Legal Product Architect highlights that “GLML permits the accurate extraction of key data from legal documentation, allowing it to be passed to relevant intermediaries in an automated and seamless way”.
By acting as an initial point of data capture, GLML also allows for faster and more efficient data analysis and identification of future opportunities. According to Smith “If the market is to take advantage of the opportunities that technology provides, there needs to be a new industry standard underpinning the primary issuance of financial instruments that optimises process flow and eliminates error risk. GLML addresses that and can do for information in financial markets what HTML did for information on the internet.”
In addition to the founding members, it is anticipated other members, representing market infrastructure providers, large financial institutions and capital markets trade bodies as well as other law firms will also join.
Theo Trayhurn, Capital Markets Partner at Allen & Overy, said “We have worked on a number of different capital markets automation projects that utilise GLML and we recognise its potential importance and impact on the capital markets. As founding members of the GLML Consortium and early adopters of the technology, we believe that having a common language for automated securities will benefit the capital markets as a whole."
Richard Levy, capital markets partner at Linklaters LLP who leads the firm’s focus on GLML, commented: “At Linklaters we currently deploy a range of efficiency tools on debt capital markets transactions and we are very excited about the additional opportunities that GLML offers our clients to modernise the DCM execution process. We are delighted to be a founding member of the GLML Consortium”.
Kate Vyvyan, capital markets partner at Clifford Chance LLP, stated "In everything we do for clients we strive to improve efficiency and quality. By applying our expertise, embracing innovation and investing in smart technology, we are setting new standards in the value and outcomes achieved for our clients. That makes our delivery more effective, every time."