Introduction
Capital Markets are a way to connect investors and borrowers for long term provision of capital. Capital markets are a venue to invest in enterprises, so that funds from investors are put to productive use. Investors or lenders can be individuals or other entities. Borrowers are companies and governments. Although the term market applies to exchanges and associated infrastructure; financial intermediaries like banks connect the various parties together. Investors are compensated directly by borrowers or are rewarded by appreciation of long-term securities. Capital Markets include the stock market and the bond market dealing with equities, bonds, and credit markets. They can also include derivatives. Securities are a way to tokenise underlying assets and have had a long history.
This large vertical is not currently covered by any SIG in Hyperledger. Finance is the Ur Use Case for blockchain.
The Capital Markets SIG will focus on Markets which deal in securities that are fungible, open, regulated heavily and have a lot more flow and participation. Please see the scope section below to get a better feel for the Capital Markets proposal.
The Capital Markets SIG studies how Hyperledger DLTs interact with Capital Markets use cases. From issuance and trading of instruments to continued market-making, management of risk ; program-trading; regulation; capital requirements; traceability; pre-trade analysis and valuation; post-Trade settlement with custody; bookkeeping and corporate actions. Architecture, identity, performance related considerations specific to Capital markets and DLTs are questions to be answered by this SIG. In the beginning, we attempt to develop a taxonomy of the domain by viewing it in multiple dimensions.
We may not discuss commodities and currency markets; although there are integration points with respect to hedging. No macro economic or general policy discussions. Payment systems remain a question mark. Retail banking also a question mark. Even if we do not discuss these, we may have to build bridges to them.
Just like the Healthcare SIG, this may have a number of sub-groups to be decided by the participants and by the natural sub-domains, but the Capital Markets SIG can remain the overall umbrella over these sectors. The use of DLTs which is a collaborative and unifying technology unify the sub-domains under the Capital Markets SIG.
What are the oracles (external sources) needed, pricing/market data, analytics- rules and regulations, continuous KYC and other concerns and emerging trends are also the domain of the Capital Markets SIG.
The bullet list of items for scope are represented in the link from the heading. Please go there to review and change the cope items.
