I have some questions regarding daml finance app on asset servicing. I am using the default scenario and have distributed the existing bond1 to the investors and now i want to lifecycle this asset.
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when i lifecycle and claim the effect, I see that system is generating settlement instructions (first coupon payments) to move cash from the custodian to the owner. But in this case the custodian is the registry and owner is investor1.
1.1 Shouldn’t the Issuer pay for the coupon payments ? Not the Registry.
1.2 In the current implementation, are these settlement instructions getting processed and failing because the registry doesn’t have any cash in its account.
Hi @Ashok_Raj,
Great question.
1.1 When you claim the effect by providing the holding, settlement instructions are generated between custodian and owner. This is because the custodian is the party owning the liability.
You are right that, in a bond scenario, the coupon payments should originate from the issuer, flow to the registrar and then be paid to end investors (see picture below).
The issue in this case is the fact that the Distribution in the app only distributes the holding from registrar to end investors, but does not create the additional holding from issuer to registrar to fully complete the hierarchical structure.
You can check this script for an end-to-end distribution + lifecycling + settlement example covering exactly this scenario.
1.2 That seems very plausible. In order to check that, you can log in as the CentralBank, go to Custody -> Liabilities and verify that the registrar does not have cash in its account.
Matteo
