As proud sponsors of the 36th ISDA Annual General Meeting (AGM), Factor and our Financial Services team were delighted to spend a week enjoying the best of the Spanish capital and ISDA. The conference marked a refreshing return to normalcy, catching up with so many old friends and connecting with new faces. It reminded us that virtual meetings are second best when it comes to sharing market insights and fostering a spirit of thought leadership.
The association didn’t disappoint, curating a wonderfully fresh and thought-provoking agenda with participation from a host of market heavyweights and some of the world’s pre-eminent regulatory bodies.
With a packed agenda in the main hall and an enviable position in the exhibition hall (opposite the break-out refreshments), the team returned from Madrid with plenty of food for thought and insights to share with the Factor family.
After over a decade of perpetual regulatory reform, there is a growing sense that a pause is ahead with the culmination of USD Libor transition and UMR Phase 6 in the next 12 months. The pause serves as an opportunity to reflect on the successes of EMIR, MiFID II, BASEL III et al and to revisit regulatory standards that came into force in recent years. It is also a time to understand both what has gone well and what measures need to be taken to further strengthen regulatory technical standards (RTS) – EMIR Refit is a good example. The content delivered on the main stage supported this trend, marking a distinct change in emphasis from years past and giving ESG and Crypto primetime coverage.
Much of the discussion focused on dissecting ESG, and addressing the merits of component parts; E, S, and G. Consensus appeared to be that to date, most focus has been on ‘S’ and ‘G’, with interesting debate on the progress of ‘E’. There appears to be some bifurcation of ESG derivatives, designing products to facilitate adherence to ‘the path to net zero’ / market provision for voluntary carbon credits and Sustainability-Linked Derivatives (SLDs), and incorporating sustainability measures to underlying derivatives such as IRS and CDS.
ISDA is providing stewardship for the Crypto community, facilitating progress towards standardized documentation to support market makers, buy-side, and infrastructure providers in these developing wholesale markets. It was also striking that the keynote presentations from SEC Chair, Gary Gensler and CFCT Chair, Rostin Behnam made explicit references to Crypto and the expectation that both bodies stand ready to ensure market rigor as institutional investment and funds continue to flow into crypto assets.
The team enjoyed the opportunity to connect with a host of delegates from in-house teams and law firms alike. We swapped stories of success and lessons learned, discussed new ideas, and spent time thinking through opportunities to unlock value across portfolios of complex legal work. Sitting at the nexus of the expertise of Traditional Law, the efficiency of New Law, and the close business integration of in-house legal (a place we call Integrated Law), we find these discussions a great way to generate actionable ideas for improving the provision of legal services.
Factor’s partnership with Acadia and Mayer Brown was announced on the first day of the conference. The team was thrilled to engage with so many delegates who were interested to learn more about Factor’s role in a service that has been designed with the buy-side in mind, in particular, UMR Phase 6 counterparties. As the market races to ensure Phase 6 compliance by September 2022, CAN Comply offers a simple, flat-fee service for the review and certification of compliance of collateral and netting arrangements. Clients simply identify the counterparty relationships they would like analyzed and all relevant information is shared via the secure digital Acadia Agreement Manager platform. Factor and Mayer Brown analyze the data provided, perform cross-validation checks, and provide a certificate that the client can present demonstrating compliance, with ongoing annual checks to confirm continued compliance available too.
Factor offers a blend of capabilities to solve complex legal work at scale when challenges such as ESG and Crypto move from matters of legal judgment to rolling out and executing large-scale client onboarding, contract review, and papering initiatives.
A huge thank you to the ISDA AGM event team for a wonderful event. We are already looking forward to the 37th ISDA AGM in Chicago, Factor’s birthplace, no less. We can’t wait to roll out a warm Factor welcome in twelve months’ time and showcase the very best of our home city.
We are enjoying continued discussions since our return from the AGM. If you would like to join the conversation, or our insights stimulate pause for thought, please do get in touch with the team. We’d love to hear from you.