Digital Derivatives Contract Templates

What we solve

Increasing complexity

The global financial services industry is facing regulatory and market pressures to move to more transparent financial instrument trade flow processes.

New regulations for margin requirements are increasing the cost of clearing and settlement while at the same time regulatory reporting must be further automated.

Yet, most inter-bank processes are distributed over multiple fronts: middle and back office applications demanding manual, labor-intensive, reconciliation work, e.g., for Derivatives Contracts.

Our Solution

The International Swaps and Derivatives Association (ISDA) is leading an industry initiative not only to set a standard for Derivatives Contract data attributes, the Financial Products Markup Language (FpML), but also to define a new standard for atomic events for process standardisation, the Common Domain Model (CDM).

Deon Digital’s Contract Specification Language (CSL) is a machine readable, state of the art contract language that allows defining Digital Derivatives contracts that are constructed based on FpML data and CDM trade flow process standards.

CSL

Deon Digital has developed an open accessible Contract Specification Language (CSL), an event-based specification language, readable by both machines and humans alike, that can be used in order to write Digital Derivatives Contract Templates.

CSL goes beyond specifying solely attributes by enabling the formalization of process flows. This renders compliance with contracts to be trivial and enables ledger based automation of clearing and settlement processes.

Database

CSL is database-agnostic. Consequently, CSL is highly interoperable: It is not only possible to store the state of a Digital Derivatives Contract on a centralised database, but also on a decentralised DLT, e.g., Fabric or Corda.

The advantage of the decentralised database are the reduced reconciliation and regulatory reporting efforts. Based on the distributed database we can also safely represent and transfer assets. Together with CSL, this enables automated clearing and settlement processes.

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