Foundation Launched to Promote Open Standards for Digitalisation and Automation in Capital Markets
- 23.07.2021 03:05 pm
The GLML Foundation has launched as a not-for-profit body to promote and continue the development of General-purpose Legal Markup Language (GLML) as an open data standard for capital markets.
The GLML Foundation continues the work of the previous GLML Consortium that was first founded in 2019 with the aim of working with market participants and other industry bodies on driving forward open standards that minimise fragmentation and prevent lock-in to any one technology product and / or vendor.
The work of the Foundation and its members is currently focused on defining a simple but comprehensive taxonomy of data points for the debt capital markets, so participants in a bond transaction can communicate key deal data for pre- and post-trade operational activities seamlessly with minimal data mapping and transformation work.
While the definition of standard data points (the taxonomy) is a key element of the Foundation’s work, the other key aspects central to this industry collaboration to build an open standard include: definition of how data points are connected to each other (the ontology); how the data is mapped with underlying legal documents for execution (the syntax); and finally how industry participants can align on “when and where” the data points occur in a process (the context metadata).
Through this framework of taxonomy, ontology, syntax and context, the GLML Foundation is able to establish the required consistency, completeness and resilience that is needed to underpin an effective and efficient open standard. Furthermore, there is a wider level of industry collaboration being driven forward, to ensure alignment with core capital markets standards, such as ISDA’s Common Domain Model (CDM) which is focused on financial instrument transaction lifecycle execution logic.
Many data standards efforts have been launched over the years by industry bodies and firms, however a lack of holistic alignment, growing fragmentation in the underlying taxonomy and associated implementation approaches are creating challenges for incumbents to adopt new technologies and innovate with automation and digital platforms.
As part of the GLML Foundation’s launch, a number of training materials, tools and templates will be released. This includes detailed documentation relating to the mark-up language specification for professionals without IT programming experience, particularly lawyers, to be able to make their legal documentation machine readable, which can then be fed into digital platforms and automation tools. This will be accompanied by a Microsoft Word Plugin to manage the creation of the documents and the associated templates for communication and workflow management i.e. the JSON template.
The GLML Foundation’s vision for GLML is an agreed open standard protocol for structuring and managing transaction data in capital markets and beyond. The Foundation will take responsibility for maintaining and developing GLML with the input of capital markets participants, including maintaining and updating the open standards, the library of proforma templates and the Word Plugin.
GLML has already been used in several transactions including LSEG’s recent $7bn transaction through their MTN marketplace platform, LSEG Flow, and DBS’s recently announced digital issuance platform, DBS FIX Marketplace. GLML has also been used in projects with market infrastructure demonstrating how data originating in structured format from legal documentation can be mapped to downstream data requirements such as for registration and settlement.
Nivaura, the creators of GLML, have now handed over intellectual property of GLML to the Foundation to empower GLML’s growth as a neutral and open standard that can be led by market participants and other trusted industry bodies.
The GLML Foundation is chaired by Phil Smith, a former partner at Allen & Overy, who said: “The launch of the GLML Foundation is an important moment for all of us who have been involved in GLML over the last few years and are convinced of its revolutionary potential. So far we have had very encouraging market feedback from our workshops and this will inform our work plan. We believe for institutions there is a great advantage to be had in being an early adopter of GLML. All financial services participants and technology providers are encouraged to become members of the GLML Foundation and become actively involved in the development and success of GLML. The involvement of different stakeholders to ensure that GLML meets the needs and requirements of all market participants is crucial to our mission.”
Theo Trayhurn, Partner at Allen & Overy added: “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 Foundation 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, Partner at Linklaters said: “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 Foundation.”