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SEC Proposes Wall Street Transparency Via Python
An anonymous reader writes "A US federal agency is considering the use of computing languages to specify legal requirements. 'We are proposing that the computer program be filed on EDGAR in the form of downloadable source code in Python. ... Under the proposed requirement, the filed source code, when downloaded and run by an investor, must provide the user with the ability to programmatically input the user's own assumptions regarding the future performance and cash flows from the pool assets, including but not limited to assumptions about future interest rates, default rates, prepayment speeds, loss-given-default rates, and any other necessary assumptions.' Does this move make sense? If the proposed rule is enacted, it certainly will bring attention to Python or other permitted languages. Will that be a good thing?"
The above quotes were pulled from pages 205 and 210 of the dense, 667-page proposal document (PDF). Market expert and professor of finance Jayanth R. Varma says it's a good idea.
This would be a fantastic idea. Not only would the rules be transparent and non-ambiguous, but the potential for experimentation and self-analysis would be incredible. Python is definitely one of the better languages to use for this, as it tends to be very readable and self-explanatory as far as programming languages go.
Maybe if the languages accepted are functional, and therefore logically provable without side-effects.
meh
downloaded and run by an investor, must provide the user with the ability to programmatically input the user's own assumptions regarding the future performance and cash flows from the pool assets, including but not limited to assumptions about future interest rates, default rates, prepayment speeds, loss-given-default rates, and any other necessary assumptions.'
...it is forbidden to have a straightforward sentence with less than two conjunctions.
'We are trying to prove ourselves wrong as quickly as possible, because only in that way can we find progress.' RPF
Something that needs to be considered is the existence of so called "Filing Agents". I work for such a business.
Right now, the SEC requires companies to file documents in a specific subset of HTML, as well as (in some cases) XBRL, which is an XML-based reporting language. In some rare cases, documents are another type of XML, or even specially formatted ASCII documents (ugh).
Securities lawyers and company administrators don't want to understand the highly technical processes involved, so they outsource their technical reporting requirements to filing agents. We take care of all the nitpicky details that they don't want to consider. Looks like we'll have to learn Python as well. We've been meaning to graduate from Perl anyway, so no big deal. :-)
So rather than actually explain what the item is, they'll just build a model of what it is, and let you put in your own assumptions.
So we'll create a bunch of programming overhead, and end up with huge improvements.
Namely that iInstead of descriptions nobody reads or understands, we'll have programs nobody runs or understands.
I've got an idea, I know it might sound crazy but here it goes.
If you see someone selling a great deal, but you don't quite get what they're selling, how it works, or even why it's such a great deal, DON'T BUY IT.
We could even impose this on industry, maybe make it a legal/ethical requirement that people moving around large sums of money act with due diligence or something.
If people actually stuck to this, and only bought things that they understood and made sense to them, the companies making these confusing products that nobody understands would have to make simpler more straightforward products.
These guys need to step back, and make products that THEY understand. If the designer of the product can't figure it out, it's too confusing. If none of the potential customers can understand it, it's too confusing.
Really if they currently can't implement the description, how does documenting it in python make it any better?
You say that jokingly, however, your point is rather poignant. If Wall Street types were presented with a way to transmit their methods and assumptions in a non-human readable way like a programming language, it becomes less transparent, not more. Sure investors can say "if a, b and c, then something happens in this black box and outputs x, y and z". They have no idea how their assumptions lead to the given result.
My view is that there just is no substitute for a system of social morality like those in eastern cultures of old. Modern society has the attitude that "if it's not illegal, do it". Unfortunately, the law will never be able to codify in black letters the rich spectrum of behavioral regulations imposed by morality, developed over thousands of years of human behavior. Thus, individuals conforming only to the law and ignoring ethics and morals will inevitably breach their moral duty, and the damage they do is limited only by their "creativity" in using the law and the social power they weild due to their position, wealth or influence.
In short, we need to disabuse ourselves of this trend to consider ethics and morals some hokey, freedom-fettering construct that has become obsolete. It is very much necessary, and Wall Street is a great place to look if you want an example of why.
I hate printers.
The average consumer cannot understand cell phone contracts, gym membership contracts, car lease contracts, bank account terms and conditions and a whole bag of other things. So you're saying they should abstain? Hell, I cant get a parking voucher from an underground car park these days without the back of it being covered in fine print you'd need a scanning electron microscope to read.
No sir, the answer isn't to "vote with your dollar". It's to acknowledge that the entire social system is broken and massively favors big money interests that are in a position to use the legal system to their own ends.
The fix is not some new piece of regulation you can come up with. You'll never be able to legislate around a population's total lack of ethics.
I hate printers.