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Of standards and technology: ISDA and technological change in the OTC derivatives market

Schammo, P.

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Abstract

For enthusiasts, distributed ledger technology (DLT) and smart contract technology (SCT) promise a future of frictionless interactions and decentralisation. In practice, however, it is widely acknowledged that this vision faces significant challenges. These include legal challenges, technological challenges, but also implementation challenges. The latter arise because delivering the DLT/SCT vision does not take place in a vacuum, but in a setting populated by existing market actors that operate on the basis of pre-existing technologies and absent an industry-wide layer of standards to support technological change and the vision of frictionless interactions. This article seeks to contribute to the literature interested in implementation challenges. Its aim is two-fold: to examine implementation challenges and to take stock of current market efforts to overcome them. In particular, this article focusses on the efforts of the International Swaps and Derivatives Association (ISDA) and its initiatives to ‘standardise to digitise’. It will show that these initiatives can usefully be examined as an attempt to help the industry coordinate on a common foundational standards layer. However, this article also finds that the success of ISDA’s efforts is by no means certain. Nor are its efforts without raising some concerns.

Citation

Schammo, P. (2021). Of standards and technology: ISDA and technological change in the OTC derivatives market. Law and Financial Markets Review, 15(1-2), 3-37. https://doi.org/10.1080/17521440.2022.2063030

Journal Article Type Article
Acceptance Date Mar 14, 2022
Online Publication Date May 4, 2022
Publication Date 2021
Deposit Date Mar 15, 2022
Publicly Available Date May 5, 2022
Journal Law and Financial Markets Review
Print ISSN 1752-1440
Electronic ISSN 1752-1459
Publisher Taylor and Francis Group
Peer Reviewed Peer Reviewed
Volume 15
Issue 1-2
Pages 3-37
DOI https://doi.org/10.1080/17521440.2022.2063030
Public URL https://durham-repository.worktribe.com/output/1215201

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http://creativecommons.org/licenses/by-nc-nd/4.0/

Copyright Statement
Advance Online Version © 2022 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group
This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way.






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