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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 (FON) for Master Agreements" the complete negotiation process will be simplified, streamlined, faster and more transparent.

FON for Master Agreements subscribers will have a much easier and consistent way to electronically negotiate contracts and extract crucial information from final contracts to feed internal risk, collateral and regulatory reporting systems. FON for Master Agreements is scalable to any type of contract and our vision is to be the industry leading platform for negotiating commercial contracts.

Key benefits of using FON for Master Agreements

  • FON for Master Agreements is a Software as a Service (SaaS) solution which is offered to its subscribers via internet. As such it delivers extremely quick adaptation, paired with low cost and minimal risk of implementation
  • FON for Master Agreements 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 on the FON platform; this means no inconsistencies, breaks or version conflicts in any negotiation
  • Subscribers to FON simply invite counterparties to a negotiation. The invited counterparties do not have to be subscribers; all they need is internet access
  • FON Subscribers can upload and maintain their own library of draft agreements, annexes and schedules in FON
  • Contract data items remain an integral part of the contract throughout the complete negotiation
  • FON'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
  • Turnkey solution - FON for Master Agreements does not require any specific installation of software or hardware
  • A full ‘round-trip’ integration with Framesoft Contract Repository (FCR) allows a seamless Master Agreement setup and negotiation process

 

 FON FCR Integration

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Negotiation Process based on FON

FON for Master Agreements negotiations are conducted in a logical, well defined process:

FON Steps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Preparation of Contract Negotiation

  • Standard templates can be quickly and simply arranged in FON (by using logical folders) into an organization specific library, which is available to FON subscribers
  • A new negotiation can then be initiated in a matter of minutes by accessing this library and selecting an existing template
  • A new contract template can also be created directly in FON (e.g. via copy & paste from MS Word), or a generated draft version from the Framesoft Contract Repository (FCR) could be uploaded
  • These templates can either be used exactly “as-is” to start a negotiation, or modified to personalize it for the relevant counterparty
  • The negotiation leader sets up the counterparty sign-in, and proposes the draft contract to be negotiated
  • The counterparty is invited by the negotiation leader to start negotiations via FON

2. Negotiation of Contract

  • The Negotiation Leader can negotiate the contract as a party or in its capacity as agent for & on behalf of another party
  • The negotiation is governed and controlled via organization specific, freely configurable workflows
  • Changes to the contract made during the negotiation are marked up clearly distinguishable by colours. These changes can be accepted or rejected at wording or clause level
  • A full version history is maintained and can be accessed directly
  • Individual clauses of the contract can be locked by the negotiation leader
  • Generic and clause specific comments can be added by all parties. Comments are represented as “sticky” notes in the margin of the agreement and can be made visible to all or selected parties only. Full discussion threading, incl. multiple threads & note colours are supported.

3. Finalization of Contract

  • When the parties have finalized the contract negotiation, the negotiation leader removes the change history from the contract and generates the execution copy
  • The contract can be signed by the negotiation leader and by the parties
  • Electronic signatures are supported

4. Contract Post Processing

  • Finalized contracts are stored and archived
  • All contract data items resulting from the contract negotiation can be uploaded into Framesoft Contract Repository (FCR) for further processing and netting evaluation. Other contract repositories could be supported upon request

 

Framesoft Online Negotiation (FON) for Master Agreements will be made available in 2018