Digital and automated bond issuance firm NowCM has partnered with White & Case to launch NexGenCP, a technology and legal advice solution for the dated and manual commercial paper (CP) market.
Automation on the platform reduces set-up time, enables a touchless issuance service and completes the lifecycle without human intervention after dealer banks email their trade confirmations to NowCM, the firms stated. Issuance can also be completed through the NowCM multilateral trading facility.
Robert Koller, NowCM founder and CEO, commented: “The simplicity of using NextGenCP is based on more than a decade of research and development, a data model of thousands of variables and business rules, a highly secure cloud platform and above all the interaction with our clients who contributed countless hours and ideas. We will see further announcements soon on bringing the funding business into the 21st century.”
NowCM’s structured data and document repository acts as the golden data source for CP-related data, the firms shared, and all data is automated and handled on a real-time basis using AI technology. A digital twin of the CP is available in a machine-readable, structured format, offering an alternative to unstructured PDF and Word documents previously used. This also ensures compliance with the European Central Bank’s “Single Collateral Management Rulebook for Europe” (SCoRE).
There are no volume limitations on issuer transactions, supporting high-frequency and parallel issuance. Franz Haniel & Cie (Haniel), an investment holding firm supporting the implementation of the NextGenCP programme, has stated its intention to complete three transactions in a week.
Axel Gros, treasurer of Haniel, said: “We are very pleased with the implementation of this state-of-the-art CP programme. Leveraging NowCM’s advanced technology and White & Case outstanding legal expertise, NextGenCP offers a process flow beyond straight-through process (STP), ensuring seamless execution from issuance to settlement to repayment, thereby helping us to efficiently manage our liquidity needs”.
NowCM acts as the arranger bank on the platform, eliminating the need for an external arranger bank and simplifying the process, it said. It operates in a traditional intermediated fashion with dealer banks, allowing for a multi-dealer structure. These participants can engage in specific transactions or at the programme level, the firms explained, stating that this enables flexibility while maintaining the benefits of traditional market structures.
NextGenCP is STEP compliant and can be used for collateral under ECB eligibility rules. An optional service of outsourced CP issuance is also available through NowCM’s regulated issuance vehicle in Luxembourg.
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