Changing the legal management of OTC Derivatives using the Blockchain.
The Challenges Smartivative Resolves
Smartivative implements smart contracts on Blockchain technology
to guarantee a trustless and transparent execution of transactions:
- Ready for future market standards
- Scalable on distributed architecture by definition
- Can operates on public or private Blockchains
OTC Derivatives Management
- ISDA Agreements negotiation and signing: MA, Schedule, CSA and other docs.
- Confirmation-> definition of financials of single derivative – it happens several times for each ISDA Agreement
- Financial management.
- Legal management – breaches, litigation, non standard flow.
The ISDA Agreements negotiation is a manual offline activity. The lifecycle is managed in the standard flow, everything else is managed manually, e.g. Legal / Misinterpretation.
What Smartivative Does
The BOT knows the parties’ rights and duties
Smartivative BOT works as a moderator that dynamically manages the parties’ actions. Everything is stored in the Blockchain.
For each event it knows the rights and the duties of the parties and shares legal references through notifications. This improves derivatives management's transparency and it can prevent litigation.
Code is Contract, Contract is Code
Aggregation & Monitoring
Smartivative provides a clear and easy view of all the derivatives traded from the party. It provides aggregation and KPIs for counterparties, ISDA agreements, confirmations. Smartivative helps in monitoring, reporting and managing legal and financial breaches. It also supports decision makers in the areas of: business, risk, operations, compliance, legal.
What if Scenario
Smartivative provides what if / scenario analysis / stress test for counterparty / ISDA Agreement / Confirmation & at portfolio level.
ISDA/Confirmation deployed in public blockchains can be copied into private blockchains and made available for tests. It’s important to emphasize that the effect of a single default can create a chain of defaults due to the specific logic of the ISDA clauses. Smartivative can simulate a set of triggers, such as different kinds of breaches, and measure the real effect of these triggers on the portfolio. This helps in risks measurement, supports in decision making and provisions management.