Glossary

This page defines some of the terminology used in the Daml Finance library.

We strive to use descriptive names and stay as close as possible to the traditional financial meaning of familiar terms.

Account

An account contract is a relationship between two parties: a custodian (or account provider) and an owner.

An account is referenced by holdings and it is used to control who is entitled to instruct and receive holding transfers.

Instrument

An instrument describes the economic terms (rights and obligations) of one unit of a financial contract.

An instrument is referenced by holdings. It can be as simple as an ISIN code referencing real-world (off-ledger) security, or it can encode specific on-ledger lifecycling logic.

Holding

A holding contract represents the ownership of a certain amount of an Instrument by an owner at a custodian.

Fungibility

Fungibility refers to the ability of an Instrument to be interchanged with other individual instruments of the same type. Fungible holdings can be split and merged.

Transferability

Transferability refers to the ability to transfer ownership of units of an Instrument to a new owner at the same custodian.

Locking

Locking is a mechanism that adds a third-party authorization requirement to any interaction with a Holding (archive, transfer, split, merge, etc.).

It is used to ensure that holdings committed to a certain workflow are not consumed by other workflows.

Crediting / Debiting

Crediting is the process of creating new Holdings for a given instrument and debiting, conversely, is removing existing ones.

Disclosure

Disclosure is the ability to reveal a contract to a third party by adding them as an observer.

Settlement

Settlement is the (possibly simultaneous) execution of ownership transfers according to predefined instructions.

Many financial transactions are traditionally settled a few days after execution.

Lifecycling

Lifecycling refers to the evolution of Instruments over their lifetime.

Lifecycling can deal with intrinsic events, like contractual cash flows, and/or extrinsic events like corporate actions or elections.

Lifecycling effect

A Lifecycling effect refers to the output of Lifecycling. Depending on the nature of the instrument being lifecycled, the effect(s) can be of different types:

• cash flow (e.g. a bond coupon)
• other distributions (e.g. shares resulting from a bonus issue)
• exchange of principal (e.g. the FX transaction resulting from a foreign exchange swap)
• exchange of other assets (e.g shares vs cash resulting from a physically settled option)