Issuing a security requires a lot of paperwork. Much of this paperwork consists of legal disclosures. These disclosures inform potential investors about the collateral backing the bonds they are buying. Generating, reviewing, and approving these detailed disclosures is hard and takes a lot of time – hours and sometimes days. RiskSpan has developed an easy-to-use legal disclosure generator application that makes it easier, reducing the process to minutes.
RiskSpan’s Automated Legal Disclosure Generator for Mortgage and Asset-Backed Securities automates the generation of prospectus-supplements, pooling and servicing agreements, and other legal disclosure documents. These documents contain a combination of static and dynamic legal language, data, tables, and images.
The Disclosure Generator draws from a collection of data files. These files contain collateral-, bond-, and deal-specific information. The Disclosure Generator dynamically converts the contents of these files into legal disclosure language based on predefined rules and templates. In addition to generating interim and final versions of the legal disclosure documents, the application provides a quick and easy way of making and tracking manual edits to the documents. In short, the Disclosure Generator is an all-inclusive, seamless, end-to-end system for creating, editing and tracking changes to legal documents for mortgage and asset-backed securities.
The Legal Disclosure Generator’s user interface supports:
- Simultaneous uploading of multiple data files.
- Instantaneous production of the first (and subsequent) drafts of legal documents, adhering to the associated template(s).
- A user-friendly editor allowing manual, user-level language and data changes. Users apply these edits either directly to a specific document or to the underlying data template itself. Template updates carry forward to the language of all subsequently generated disclosures.
- A version control feature that tracks and retains changes from one document version to the next.
- An archiving feature allowing access to previously generated documents without the need for the original data files.
- Editing access controls based on pre-defined user level privileges.
Overview
RiskSpan’s Automated Legal Disclosure Generator for Mortgage and Asset-Backed Securities enables issuers of securitized assets to create legal disclosures efficiently and quickly from raw data files.
The Legal Disclosure Generator is easy and intuitive to use. After setting up a deal in the system, the user selects the underlying collateral- and bond-level data files to create the disclosure document. In addition to the raw data related to the collateral and bonds, these data files also contain relevant waterfall payment rules. The data files can be in any format — Excel, CSV, text, or even custom file extensions. Once the files are uploaded, the first draft of the disclosures can be easily generated in just a few seconds. The system takes the underlying data files and creates a draft of the disclosure document seamlessly and on the fly. In addition, the Legal Disclosure Generator reads custom scripts related to waterfall models and converts them into waterfall payment rules.
Here is a sample of a disclosure document created from the system.
Blackline Version(s)
In addition to creating draft disclosure documents, the Legal Disclosure Generator enables users to make edits and changes to the disclosures on the fly through an embedded editor. The Disclosure Generator saves these edits and applies them to the next version. The tool creates blackline versions with a single integrated view for managing multiple drafts.
The following screenshot of a sample blackline version illustrates how users can view changes from one version to the next.
Tracking of Drafts
The Legal Disclosure Generator keeps track of a disclosure’s entire version history. The system enables email of draft versions directly to the working parties, and additionally retains timestamps of these emails for future reference.
The screenshot below shows the entire lifecycle of a document, from original creation to print, with all interim drafts along the way.
Automated QC System
The Legal Disclosure Generator’s automated QC system creates a report that compares the underlying data file(s) to the data that is contained in the legal disclosure. The automated QC process ensures that data is accurate and reconciled.
Downstream Consumption
The Legal Disclosure Generator creates a JSON data file. This consolidated file consists of collateral and bond data, including waterfall payment rules. The data files are made available for downstream consumption and can also be sent to Intex, Bloomberg, and other data vendors. One such vendor noted that this JSON data file has enabled them to model deals in one-third the time it took previously.
Self-Serve System
The Legal Disclosure Generator was designed with the end-user in mind. Users can set up the disclosure language by themselves and edit as needed, with little or no outside help.
The ‘System’ Advantage
- Remove unnecessary, manual, and redundant processes
- Huge Time Efficiency – 24 Hours vs 2 Mins (Actual time savings for a current client of the system)
- Better Managed Processes and Systems
- Better Resource Management – Cost Effective Solutions
- Greater Flexibility
- Better Data Management – Inbuilt QCs
