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Overview

Over-the-counter derivatives and commodities trading is a huge market and heavily relying on master agreements agreed between the trading parties. Participating financial institutions and trading companies spend billions of dollars annually negotiating master agreements because the process is heavily fragmented and inefficient due to negotiations based on MS Word documents shared via e-Mail between the involved parties.

By introducing "Framesoft Online Negotiation for Master Agreements (FON for MA)" the complete negotiation process will be simplified, streamlined, faster and more transparent. FON for MA is a platform for electronically assembling, generating, reviewing and negotiating (master) agreements.

For this purpose, FON for MA is completely integrated in Framesoft Contract Repository (FCR) supporting a seamless interaction with any agreement request workflow & agreement type specific data points. For interaction with counterparties involved in a negotiations a FON for MA satellite can be established in a de-militarized zone (DMZ) or application service center. Alternatively, FON for MA is also offered as Software as a Service (SaaS) via internet.

Using FON for MA will offer a much easier and consistent way to electronically assemble, generate and negotiate contracts as well as extract crucial information from final contracts to feed internal risk, collateral and regulatory reporting systems. FON for MA is scalable to any type of contract and our vision is to be the industry leading platform for negotiating commercial contracts.

FON FOR MA Overview

Key benefits of using FON for MA

  • FON for MA is completely integrated in the Framesoft Contract Repossitory (FCR) for seamless integration of
    • Agremeent Type Setup,
    • Agreement Request Workflows,
    • Agreement Document Assembly,
    • Integration of 3rd party agreements
    • Document Generation
    • Agreement Review & Negotiation
    •  Framesoft Document Intelligence Module
    • Reporting & Analysis
  • FON for MA simplifies the administration, enhances the transparency as well as speeds up the negotiation process between the negotiation parties
  • All documents related to the negotiation are managed centrally in FON for MA; this means no inconsistencies, breaks or version conflicts in any negotiation
  • Subscribers to FON for MA simply invite counterparties to a negotiation. The invited counterparties do not have to be subscribers; all they need is internet access
  • FON for MA Subscribers can upload and maintain their own library of draft agreements, annexes and schedules in FON for MA
  • Contract data items remain an integral part of the contract throughout the complete negotiation
  • FON for MA's integrated document editor
    • safeguards data items to ensure data integrity and seamless backward reconciliation into corporate systems
    • speeds up negotiation by supporting parallel negotiation workflows on distinct clauses of the contract
  • Full audit trail of the negotiation process
  • Optimization of negotiation via workflow control
  • Any number of parties may be involved in a negotiation. New parties may be added whenever they are required
  • Each negotiation can consist of any number of documents
  • Secure access to contracts; both parties access a single version of the contract via a high security link using tunnelling and encryption

FON for MA integrated into FCR

1. Automatic Draft Document Generation

Any document generation can be embeeded into a workflow, intitiated manually or driven by an external action.

2. Structured Agreement Document Assembly

Dynamical creation of any type of agreement documents via FON for MAs "Contract Template Management Module. The creation is based on the flexible online configuration of a “Master” document and its individual components such as

  • Sub-Documents (Master Agreement, Schedule, Annex, etc.)
  • Sections (e.g. Obligations, Early Termination, etc.)
  • Clauses (e.g. (a) General Conditions, (b) Change of account, etc.)

based on an atomized clause library.

3. Master Agreement Review & Negotiation (Wokflow)

Internal and counterparty participants can be invited and internal reviews as well as externa negotiations can be conducted based on the automatically generated agremeent draft documents via FON for MA integrated in FCR directly. FON for MA takes care of all required actions such as:

  • “Merge Handling“ of updates pushed into a currently reviewed agreement by
    • new standard clause versions,
    • non-standard clauses approved
    • data point updates
    • individual updates of clause text in the reviewed / negotiated document
  • Automated generation of new agreements / amendments triggered by a standard clause or data point update 

In addition, FON for MA has been extended by a messaging component which lists all activities performed & allows a direct communication (chat) between the parties involved. Invited counterparties do not have to be a FON for MA subscriber; all they need is internet access and a browser (e.g. Google Chrome or MS Internet Explorer) to participate in a FOn for MA based negotiation. When the parties have finalized the contract negotiation, the contract can be signed by the Negotiation parties. Electronic signatures are supported. Finalized contracts are stored and archived. The contract data point changes resulting from the negotiation are reconciled with FCR.

4. Integration of 3rd Party Agreements

If an agreement shall be based on a 3rd party document (e.g. received by the counterparty), the agreement request workflow in FCR can be conducted and the template can be imported into FCR (via FON for MA). Upon the import clasues are recognized automatically and compared against identified similar clauses in the own library via "Clause Compare". Clause Creation and Clause Compare are making use of AI algorithms.  

5. Framesoft Document Intelligence

The Framesoft Artificial Intelligence (AI) module "Framesoft Document Intelligence" module can also be integrated with FON for MA & FCR supporting

  • (Agreement) clause compare / evaluations,
  • Clause categorizations and classification
  • Data point detection / extraction / reconciliation

6. Reporting & Analysis

For agreement lifecycle management purposes an extended Template Repository Search (Clause Search) is offered for

  • searching for expressions within the clause template repository and / or signed contracts (execution copies)
  • searching for agreements containing a selected clause
  • searching for agreements containing selected (Sub-) documents / sections / clause configurations
  • clause versions and its usage in agreements
  • what if analysis – how many generated agreements would be affected by a clause update

In addition, Framesoft Data Insight (FDI) has also been integrated into FCR to further extend these reporting & analysis functionalities.