The Global Documentation Steering Committee (GDSC) was dissolved in August 2007 in recognition that it had largely achieved its goal of influencing organizations that sponsor market documentation to address “documentation basis risk” and the other issues that had animated the GDSC since its foundation in 1999. The GDSC additionally considered that it had raised awareness of legal and documentation concerns to the degree that it could and felt the issue would be more effectively addressed by senior business leaders.

The GDSC was created in 1999 with the mission of implementing the documentation-related recommendations published earlier that year by the Counterparty Risk Management Policy Group (CRMPG I). CRMPG I, a group of 12 major internationally active commercial and investment banks, was formed with the objective of promoting enhanced practices in counterparty credit and related risk management after the market disruptions of 1997 and 1998. Among CRMPG I’s recommendations, and the original reason for the GDSC’s creation, was the standardization of documentation to avoid inconsistencies, to reduce concomitant risk and to improve efficiency of the markets.

The GDSC’s primary objective was to encourage harmonization in standard over-the-counter documentation and to minimize disparities that can exacerbate market, credit and legal risk. Many "industry standard" documents had been developed over a period of decades, prior to the globalization of the markets and the increased interrelationship among financial markets and participants. Resulting inconsistencies in documentation gave rise to what CRMPG I characterized as "documentation basis risk" - the risk that economically similar transactions (often used to hedge one another) are documented differently and that close-out provisions, such as those involving the termination of agreements, valuation of terminated transactions and related matters can produce unintended different economic results.

The GDSC also focused on market practices and procedures relevant to the documentation process. In pursuing its mandate from CRMPG I, it became apparent to the GDSC that the documentation process, and more particularly, the efficient functioning of that process, could also be instrumental in reducing risk.

At the request of the re-convened Counterparty Risk Management Policy Group in 2005 (CRMPG II), members of the GDSC took the lead in updating CRMPG recommendations on documentation content, policies and procedures.

In summary, during its tenure the GDSC’s mission was to tackle critical documentation risk issues challenging the industry. Its members included important industry groups such as ISDA, SIFMA, EMTA, LSTA and MFA, as well as market participants including major dealers, corporations and end-users of financial products. The GDSC was sponsored by, but independent of, the Federal Reserve Bank of New York (NY Fed).