Date

01 Mar 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/SEC/issues/SEC-7?filter=allopenissues

5) Todays content discussion.

SMIF OWL-UML

SKOS

RDF/S

6) For next week.

Proceedings:

Addressed issue SEC-140, which included call price and put price (terms typically used for options, if at all), replacing those terms with monetary price. Also discussed the open hygiene issue related to conflating zero coupon and original issue discount bonds.

Zero Coupon Bond:

A zero-coupon bond is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value.The difference between the purchase price of a zero-coupon bond and the par value, indicates the investor's return. A zero-coupon bond is also known as an accrual bond.

The interest earned on a zero-coupon bond is an imputed interest, meaning that it is an estimated interest rate for the bond, and not an established interest rate. Imputed interest is sometimes referred to as "phantom interest".

For example, a bond with a face amount of $20,000, that matures in 20 years, with a 5.5% yield, may be purchased for roughly $6,855. At the end of the 20 years, the investor will receive $20,000. The difference between $20,000 and $6,855 (or $13,145) represents the interest that compounds automatically until the bond matures.

Original Issue Discount (OID) Bond:

An original issue discount (OID) is the discount in price from a bond's face value at the time a bond or other debt instrument is first issued. Bonds can be issued at a price lower than their face value—known as a discount. The OID is the amount of discount or the difference between the original face value and the price paid for the bond.

For example, let's say that a bond has a $100 face value, meaning the investor would receive $100 returned at the maturity date. If the investor buys the bond for $95 and receives $100 at maturity, the OID is $5, which is the return on the investment.

All from Investopedia. Note that a big difference is that although both are bought at less than face value, the zero coupon bond never pays interest but an OID bond does pay interest like a regular bond.

We also looked at the remaining informative ontologies, all of which are in Foundations. There are 3 classes in the agreements related provisional contract elements ontology that we might retain and move to contracts, related to representations, warranties, and termination, all of which are commonly part of a contract, and are missing at the top level in contracts. John will take a look at those as well this week and Elisa will check with Rob Kost on how we should define those clauses and potentially what else is missing at the top as a model of a contract.

Decisions:

Action items

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