Our objective was to implement the ISDA CDM through emerging technology enablers to solve for representative use cases in post-trade processing. The host, Barclays, set challenging use cases to simulate the derivatives market and provided sample trade data in ISDA CDM representation to achieve them.
We got awarded for designing an application for the smarter derivatives market based on DLT (Distributed Ledger Technology).
The International Swaps and Derivatives Association (ISDA) has a new standard that defines the processes for derivatives transactions (such as interest rate swaps and credit default swaps). It has brought CDM — a common foundation for new technologies to be implemented like distributed ledger, cloud and smart contracts for improving data consistency.
Barclays DerivHack aimed to accelerate the adoption path of the distributed ledger technology that could lead to potential $2.5 billion cost savings for the industry.
There were five assignments during the hackathon:
- Setting up counterparties on the platform.
- Creating new trades (rate swap and credit default swap) and establishing additional counterparties.
- Creation of trade events such as a notional change, 3 and 4-way novations, partial & full terminations, rate resets, accruals and fee payments.
- Providing settlements with payment netting.
- Reporting on trades for a specific trade date, or the life history of a single trade.
- CDM demonstrated its potential to become an industry standard.
- Corda DLT, the open-source platform by R3, is applicable for the creation of derivatives applications to run transactions across each other without compromising privacy and security.
- INDUSTRIA is the right partner to accelerate the adoption path.
- The efficiencies with the implementation of the DLT could potentially save the sector $2.5 billion a year.
- Other industries (including non-financial ones) could similarly benefit from hackathons.