Smart Derivatives Contracts: the ISDA Master Agreement and the automation of payments and deliveries

04/01/2019

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by   Christopher D. Clack, et al.

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High-value derivatives contracts require substantial legal protection and often utilise standardised legal documentation provided by the International Swaps and Derivatives Association (ISDA). Smart Derivatives Contracts aim to automate many aspects of high-value contracts, including automation of the provisions of the ISDA legal documentation. Here we investigate how the ISDA Master Agreement may affect the automation of payments and deliveries: we provide a framework for understanding how high-value derivatives contracts are structured at different levels, in terms of both the legal documentation and the workflow; we explain issues relating to how the smart contract code processes payments-related and deliveries-related events; and we discuss the extent to which these are amenable to automation.