Date

18 May 2021

Attendees

Agenda

1) Use Case reminder

2) Where we are on our road map.

3) Open Action Items

4) JIRA Issues Review - https://jira.edmcouncil.org/projects/DER/issues/DER-10?filter=allopenissues

5) Todays content discussion.

6) For next week.

Proceedings:

Discussed adding hasContractSize to instrument pricing in parallel with hasLotSize - which is not a synonym for hasLotSize. We simplified that out in favor of hasLotSize, but have determined we need it, in instrument pricing or probably in derivatives. It should be a subproperty of hasNumericValue, similar to lot size.

For lot size - In terms of options, a lot represents the number of contracts contained in one derivative security. One equity option contract represents 100 underlying shares of a company's stock. In other words, the lot for one options contract is 100 shares. (we have this).

For contract size - see https://www.investopedia.com/terms/c/contractsize.asp. Derivatives contracts are securities that are based on the price of some underlying asset such as stocks, bonds, commodities, currencies, and so on. The amount of the underlying asset represented in a derivative contract is its contract size.? We also need to revise the explanatory note on hasLotSize - see DER-100.

Discussed contract novation, which appears oddly in options, but applies to any contract. Definitions:

Novation is the replacement of one of the parties in an agreement between two parties, with the agreement of all three parties involved. To novate is to replace an old obligation with a new one. For example, a supplier who wants to relinquish a business customer might find another source for the customer. If all three agree, the contract can be torn up and replaced with a new contract that differs only in the name of the supplier. The old supplier relinquishes all rights and obligations of the contract to the new supplier.

We elected to remove these classes from options but consider adding this to FND to contracts.

Market maker: need a definition for this where we define trader, in FBC products and services - see https://www.investopedia.com/ask/answers/06/brokerandmarketmaker.asp. Also need to complete DER-64 to add market participant. Also see https://www.optionsplaybook.com/options-introduction/options-traders/. Market participant needs to be defined either at the derivatives level or securities level, and it would replace options exchange participant in options.

Options exchange participant is a market participant. Also see authorized participant - may need both, but in the options case perhaps an authorized participant is a subclass of market participant? Might be specific to ETFs. See https://www.blackrock.com/au/intermediaries/ishares/authorized-participants-and-market-makers. Could need market participant, exchange participant, and authorized participant for ETF. To be continued ...

Decisions:

Action items

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