FpML Issues Tracker
closed
Minor
Always
Modeling Task Force
Admin
BrianLynn
Summary
The term "trade" should only be used to refer to the trading event and the resultant contract. From there on all changes to the contracts should not be called trades, nor should the contract itself.
Notes:
mgratacos
10/18/06 8:06 am
This is relevant to allocations. The end result is the contract, not the trade.
matthewdr
04/09/08 10:26 am
Assigned to MTF.
BrianLynn
04/09/08 11:14 am
The MTF discussed this issue and agreed that the current inconsistency between trade and contract should be resolved in favor of reverting to “trade” for all OTC derivative transactions. The arguments included:
– the term “contact” is not well-supported by ISDA documentation
– in many cases, the inital (unallocated) transaction is a legally binding contract recorded electronically, so the distinction is invalid
– allocating to contracts does not work in the case of a multi-level allocation process.
This recommendation is contained in the MTF initial report, dated Jan. 18, 2008.
matthewdr
04/09/08 2:30 pm
Brian – thanks for the swift feedback. The issue isn’t about contract vs trade – it is agnostic to that. It is about being clear that post trade events in the lifecycle aren’t called trade. For example – TradeTerminated doesn’t terminate a “Trade”.
To generalize the questions:
1. Do we distingusish between an event (e.g. “car crash”), and the resultant ‘object’ (e.g. “crashed car”)?
2. Do we give the event and the resultant ‘object’ the same name or different names? i.e. I propose that different concepts must always have different terms (i.e. unique names). This is the “homonyms banned” principle – that different things must have different terms.
3.