Allen & Overy and docGenix launched docGenix, an independent firm offering innovative services to give financial institutions the ability to manage documentation risk.
The services provided by docGenix utilize advanced technology and analysis techniques originally developed within Allen & Overy's affiliate, Derivative Services.
The initial focus of docGenix is the documentation used in the OTC derivatives markets. These markets have seen exponential growth and many market participants are already party to thousands of complex legal agreements, mainly in the form of industry standard ISDA Master Agreements and associated credit support documents and amendments.
The ISDA Master Agreement serves as the contractual basis for the most trading in a market that, according to the latest projections of the Bank for International Settlements, has a total outstanding notional value of $ 596 trillion.
As portfolios of ISDA agreements and related documents continue to grow, the company release said that the credit market crisis of 2007 and 2008 has focused the attention of market participants, industry groups, regulators and others on the need for parties to put in place improved documentation risk management processes.
A key theme behind a number of the recommendations made in the report of the Counterparty Risk Management Policy Group III (called Containing Systemic Risk: The Road to Reform) is the need for parties to have both an ongoing understanding of how their ISDA agreements would be impacted by the distress or failure of a counterparty or deteriorating market conditions and the ability to gain quick and comprehensive access to data embedded in these agreements if those circumstances arise.
With its introductory service offering, inSight, docGenix offers a unique long-term solution. The inSight service involves the automated conversion of ISDA agreement portfolios into a highly structured eXtensible Mark-up Language (XML) format, which gives subscribers the on-demand ability to access and analyze information in either vertically within an individual agreement or horizontally across any number of agreements within their portfolios.
Also included is an optional user query tool, which provides subscribers with a real-time means to access and analyse both text and data on an individual, group or portfolio basis as well as a standardised and user-defined reporting capability. Having vastly improved access to critical legal, financial and operational information and the ability to stress-test documentation portfolios against hypothetical events such as ratings downgrades or declines in net asset value will enable subscribers to improve their risk management and operational processes, their ability to react to events quickly, and, in turn, overall decision-making.Leading the new company as chief executive officer is Daniel Mudge. Michael Will, co-founder of and partner at DS, is named founder and chief technology officer, and John Berry, formerly counsel in Allen & Overy's derivatives and structured finance group, is named general counsel. The non-executive board members are senior Allen & Overy partners Jonathan Brayne and Daniel Cunningham, Joseph Bauman, director and chief administrative officer of Athilon Group Holdings Corp., and Joseph Sigelman, chief executive officer of PetroTiger.