Glossary of Terms



Membership or belonging to an organisation or entity. A way to show you belong to that organisation or entity. i.e. email account, bank account


A unique alphanumeric value that is a User’s public key


Anti Money Laundering. The process of checking the credentials of participants and transactions for the purposes of combatting illegal activity


A front-end web application platform


Application Programming Interface – the method by which various software components are able to communicate


An asset is an entity, usually of value - e.g. a share. On the blockchain an asset consists of a namespace and classid e.g. Bank Of England | GBP

Asset Class

The classid of an asset (usually a currency)



The data access part of a system (essentially, where the databases are maintained)


Bank Identifier Code


A cryptographic currency, the holding of which is recorded on a public permissionless blockchain


A ledger, or list of records, maintained with cryptographic security. The blockchain is distributed across multiple locations

Blockchain Transaction

An instruction to change a balance on a distributed ledger which will be incorporated into that ledger by way of its inclusion into a cryptographically secured block of transactions

Block Height

A reference to a specific block within a blockchain


A server, usually virtual (“install that db on a box”)

A computer, usually physical (“I saved it to my box”)

SETL’s cloud storage provider, often used as a noun. (“I shared it on Box”)


A market participant who acts on behalf of the beneficial owner to arrange a transaction


A VPN supplier



Commercial Paper

Calculation Agent

An appointed party to a contract whose role is to provide data or to calculate items which are then used to determine rights and obligations under the contract

Capital Adequacy Ratio

The ratio of unencumbered capital that a bank has relative to the amount that it must have to carry on its regulated activities


Central Counterparty - a specialist organization that steps in as the buyer to every seller and the seller to every buyer as part of the securities clearing process


An organization that certifies the identity of a participant in a blockchain or distributed ledger scheme


The process of extinguishing mutual obligations by netting


The process of writing a collection of transactions to a database as a single block in a manner where either all or none are recorded


A cryptographic technique for hiding a value in a way that it can be later revealed but cannot be changed in the meantime – analogous to a ‘sealed bid’


An expression that is evaluated to be true or false. E.g. 1 < 2 is true. Today > 10/01/2099 is false

Confidential Transactions

A blockchain transaction where the details are cryptographically blinded from the nodes that undertake verification

Consensus Algorithm

The method by which participants in a blockchain or distributed ledger arrive at the same record of balances and transactions


A legally enforceable agreement for the sale or lease of employment, goods, or property.


SETL’s blockchain system’s purpose is to securely store financial transactions and perform transactions in a manner that is more efficient and more reliable than other blockchain providers or other systems. A blockchain in actuality *could* be used to record any valuable digital information – cryptocurrency, medical records, school records, contracts, etc. – but the SETL core system is used for financial transactions.

Corporate Actions

An operation such as a dividend or a share split applied to the ledger of record

Cross Chain Transactions

A transaction which transfers value from one blockchain to another usually achieved by the first blockchain immobilizing or destroying an asset and the second blockchain creating a corresponding asset

Crypto Currency

A currency system under which units are issued and exchanged using cryptographic techniques to guard against duplication and double spends

Cryptographic Proof

The use of cryptography to prove or assert something (rather than to encrypt or hide something) - cryptographic proofs frequently used in blockchain and distributed ledger systems include hashing, signing and Merkle tree proofs


Central Securities Depository – an organisation holding securities to allow them to be transferred using a ledger, rather than physical transfer of certificates


Central Securities Depository Regulations - a Europe-wide set of rules to regulate CSDs


A person who holds clients’ securities for safekeeping to minimise their risk of being stolen or lost - a person or institution that can exercise legal authority over the financial assets of another person or company



Directly Connected Party


A failure to meet a contractual obligation

Delayed Net Settlement

The process by which the settlement of obligations are delayed for the purpose of allowing opposite and offsetting obligations to arise which are then netted


Securities are said to be dematerialized if they are recorded and exchanged only via book-entry


Contracts on which obligations and rights are determined with regard to asset or index

Digital Signature

A cryptographic proof that the signer is in possession of a particular private key - the signature can be verified by anyone who is in possession of the corresponding public key

Distributed Ledger

A ledger of balances and/or transactions which is distributed between a number of locations or parties such that changes are agreed and replicated according to the application of a consensus protocol


Distributed Ledger Technology


Delivery versus Payment - the simultaneous change of ownership against the payment of a consideration



Elliptic Curve Diffee-Hellman - an anonymous key agreement protocol that allows two parties, each having an elliptic curve public–private key pair, to establish a shared secret over an insecure channel

Elliptic Curve Cryptography

A branch of cryptography which uses elliptic curves to generate pairs of public/private keys


When referenced in management accounting, encumbrance is a tool used to reflect commitments within a budget to avoid overspending, to predict cash-flow, and as a planning tool


A computing device (such as a laptop, a PC, a phone) or node (e.g. modem, router, server) that is connected to a network


A permissionless blockchain that uses a crypto-currency (Ether) and a mining-algorithm to incentivize participants to execute censorship resistant code snippets to carry out a programmed task


A location where bargains are agreed



Financial Information System. A FIS is an organised way of collecting and analysing business information in order to inform management decision making


A protocol used between financial institutions primarily to manage orders, to instruct exchanges and to receive confirmation of executions of all types of securities


A disagreement between participants which results in competing versions of a distributed ledger - they are prevalent on blockchains that use mining and crypto-currency reward systems rather than majority voting


The presentation layer of a system (the UIs that the end user sees and uses)


The property of a good or a commodity whose individual units are capable of mutual substitution - the property of essences or goods which are “capable of being substituted in place of one another”


General Clearing Member

A party who is able to participate in a clearing system on behalf of the participants of a trade

Golden Record

A ledger of balances and transactions which is immutable, correct and complete


Hash Function

A cryptographic technique that reduces a block of text, series of transactions or computer file to a unique string of characters and numbers that are an effective fingerprint - any change, however small, will produce a completely different fingerprint making such changes immediately apparent and auditable




Immutable Record

A record that cannot be feasibly changed by virtue of cryptographic techniques


Information Security – preservation of the confidentiality, integrity and availability of information assets (i.e. data)

Interbank Payments

Payments between banks which extinguish interbank liabilities - when customers of different banks make payments to each other, those banks must transfer value between themselves to meet the payment and this is typically done in “central bank money”


Issuing and Payment Agent


International Securities Identification Number


An Issue is the process of a company raising funds that, typically, is done by offering bonds or stocks


An entity that issues assets



A general-purpose programming language normally associated with back-end applications


Jenkins is an Open Source development tool that allows code to be tested before committing to the repository, thereby preventing breaking a build


JavaScript – the programming language for web-based activity – normally associated with front-end applications


An area in which a particular law applies



Know Your Client - an obligation on a financial services company to know the identity, location and business activities of their clients



Legal Entity


Legal Entity Identifier - a scheme under which legal entities are assigned a unique identifier which can then be used to positively identify their participation in contractual activity

Liquidity Management

A Bank’s process for maintaining a proportion of its assets in cash or near-cash instruments for the purposes of meeting immediate liabilities



A Stockholder or Shareholder of a firm - those who join a firm at its creation are known as founder members

Member Node

An OpenCSD component – essentially a database of verified users of the system

Merkle Tree

A method for combining cryptographic hashes in a tree structure where individual items are hashed, combined and hashed again in binomial tree resulting in a single combined hash that is a fingerprint for the whole collection of hashes


The process of performing a computationally expensive exercise in return for a possible reward - used in a number of crypto-currency systems as part of a process of incentivising anonymous and untrustworthy participants to arrive at a consensus


MongoDB is a free, open source, non-SQL Document-Oriented database, meaning that it indexes on collections and documents rather than tables and rows


A requirement for more than one cryptographic signature to be given to authorize a blockchain transaction



Negotiable EU Commercial Paper


An instance of software that processes transactions and keeps a distributed ledger up to date


A number created for one-time use - typically added to a block of data to make the combination of the data and the number unique



SETL’s proprietary CSD system (ledger of transactions) based on a blockchains


Parallel Operations

A computational technique which splits the work of computing across a number of separate processes or computers in order to increase speed

Peer to Peer

Communications or transactions that are between individual parties and are not routed through a trusted third party


Permissioned blockchains do not permit anonymous participation and insist on identity, KYC or AML requirements being met


Permissionless blockchains allow anonymous participation and do not insist on identity, KYC or AML requirements being met


Public Key Infrastructure - a procedure under which trusted parties sign public keys and associate those public keys with a real-world person or identity

Private Chain

A blockchain where all the nodes are controlled by a single party

Private Key

A long number used to encrypt messages which can only be decrypted using the associated public key - private keys are used to sign transactions submitted to blockchains and distributed ledger

Proof of Stake

A method of achieving consensus that relies upon participants voting in accordance with the amount of ‘stake’ or ‘rights’ they have in a system

Proof of Work

A method of achieving consensus that relies upon participants working (mining) for a crypto-currency reward


The process of a transaction being communicated around all of the nodes in a blockchain


A group of transactions being proposed for inclusion in the blockchain or distributed ledger

Public/Private Key Pair

A pair of cryptographic keys, one of which is kept private and one of which is published

Public Key

A long sequence of characters used to decrypt messages which have been encrypted using the associated private key


Payment vs Payment - typically a payment in one currency in return for payment in another currency – i.e. FX


Rabbit MQ

Open source Message Queue (MQ) software


A feature of blockchain systems which arises from the fact that the ledger is stored and updated at multiple locations


The organization that maintains a register of the owners and the number of securities held for a mutual fund, bond, or stock and fulfils the appropriate obligations for the issuer


The ability of a system to cope with disruption


Representational State Transfer. A method of providing interoperation between systems on the internet.

Ring Signature

A cryptographic method that allows a verifier to be sure that one of a number of parties has signed an assertion without knowing specifically which party - used to maintain confidentiality whilst giving the verifier confidence that one of a number of acceptable conditions exists



Static Data (within CSD systems)


Securities are any tradable financial asset, and can be debt securities (such as bank notes, or bonds) or equity securities (stocks and shares)


The full and final extinguishing of an obligation

Settlement Asset

The asset used to extinguish an obligation - between banks it will typically be a central bank obligation

Settlement Fail

The failure to meet a settlement obligation – either by failing to deliver an asset against a payment or failing to deliver a payment against the delivery of an asset

Settlement Finality

The process of achieving irreversibility in the settlement of an obligation. In particular, after settlement finality, the receiving party is protected from the bankruptcy of the payer


Blockchains that can interoperate in some way

Simultaneous Settlement

The process of ensuring that assets and consideration are exchanged at the same instant in settlement of a transaction

Single Point of Failure

Any part of a system, which, should it fail would, on its own, render the whole system inoperable

Single Sided Payment

A payment without an associated asset transfer

Smart Contract

A piece of code or a routine, recorded on a blockchain, which executes the terms of a contractual agreement by moving assets between participants

State Record

A record of the state of a ledger of blockchain at a particular point of time


A party who holds an asset on behalf of a beneficial owner but, themselves, uses a custodian to hold the asset on their own behalf


The Society for Worldwide Interbank Financial Telecommunication provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment

System Specific Assets

Assets which are recorded as an account balance on a system which only allows their deployment for particular purposes – e.g. for the settlement of FX or Bonds



TARGET2-Securities is a European securities settlement engine – a way of streamlining the settlement process across national borders

Transactions Per Second

The number of transactions which can be processed in a second


In banking, this refers to the movement of funds between two or more accounts, whereas in securities trading, it relates to delivery of stock certificates by the seller to a buyer by recording the transaction in the stock register


The degree to which a blockchain provides an auditable, secure and complete record of activity

Trapdoor Functions

Mathematical functions which are easy to complete in one direction but hard in the other e.g. multiplication is easy whilst factoring is hard - such functions form the foundation of public/private key cryptography



User Acceptance Test


User Interface – displayed on the screens that the end user will use


A person who has permission to use an application, equipment, facility, process, or system


Validation Node


Virtual Machine


Virtual Private Network – a highly secure method of connecting devices over the internet



A Wallet is a small software application that is used to store various payment methods (such as multiple credit cards, electronic cash, coins) used for online purchases

Wallet Node

A SETL software component that exclusively handles Wallets and associated data traffic

Witness Node

A piece of software that connects different blockchains

WorkFlow Engine

A Workflow Engine is software that is used to automate and manage the flow of information, tasks, and events


Zero Knowledge Proof

A cryptographic technique that allows a verifier to satisfy themselves of the truth of an assertion without the prover giving away any information about themselves