Futures Industry Association
Establish trading relationships more quickly, reduce costs and save time
The Electronic Give-Up Agreement System (EGUS) automates the online creation, amend (changing the legal text), review and approval by all counterparties - executing and clearing brokers, customer and traders - of eight different variations of Give-Up Agreements and two different variations of Exchange for Futures for Physicals Transactions Agreements.
EGUS produces executed agreements which are identical to those created before the system was launched. Thus EGUS reduces processing times and execution costs significantly. The system has dramatically decreased the time to execute an agreement from an average of 39 to 2 days. One agreement between parties in the US and UK took just 45 minutes - unheard of before EGUS.
Reduce Days Outstanding for Fee Payments
EGUS distributes the give-up agreement and fees, via XML, to billing and reconciliation systems of participating institutions and to payment systems of exchanges. EGUS, acting as the central authority ("golden" copy) of agreement and fees, eliminates the duplicate entry into the system of each counterparty. Thus, EGUS reduces errors, saves time, and reduces days outstanding for fee payments when everyone is working from the same "golden" copy of the agreement and fees provided electronically by EGUS.Benefits
FIA estimates that the average cost of executing a give-up agreement including staff time and postage frequently exceeds USD100 per agreement. Executing give-up agreements used to be an administrative nightmare.
EGUS enables market participants to:
- Drastically reduce the average time it takes to fully execute give-up agreements to just one to four days. FIA surveyed its advisory board and found that prior to EGUS it took an average of 35 days (with a range of several days to several months) to fully execute give-up agreements
- Reduce Days Outstanding for fee payments
- Eliminate mailing and handling costs associated with give-up agreements
- Establish trading relationships more quickly – Charge commissions sooner
- Reduce staff time associated with administration of give-up agreements
- Easily correct or update agreements – EGUS alerts participants to review and approve agreements
Other advantages include:
- Duplicate electronic agreements for disaster recovery
- No corrections can be made without all parties being notified by EGUS
- Built-in agreement comments – facilitates communication for all participants
- Fast, efficient search and retrieval of executed agreements
- Agreement transaction history – shows who and when each step was completed
- Give-up agreements executed in EGUS are never lost in transit
- Pre-populated contact list on each agreement