The SEC and Python?

Wednesday, April 28th, 2010

Prof. Jayanth R. Varma’s Financial Markets Blog mentions an April Fools-worthy proposal — two weeks too late — involving The SEC and Python:

We are proposing to require that most ABS issuers file a computer program that gives effect to the flow of funds, or “waterfall,” provisions of the transaction. We are proposing that the computer program be filed on EDGAR in the form of downloadable source code in Python. … (page 205)

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 … (page 210)

The waterfall computer program must also allow the use of the proposed asset-level data file that will be filed at the time of the offering and on a periodic basis thereafter. (page 211)


Joseph Fouché has some fun with the idea:

An executable security filing may have advantages over paper filings. Debuggers for programming languages are, at this point, more advanced than debuggers for corporate accounting and derivatives. Putting the security filing in Python will actually make it more readable, since the last time I checked most financial statements aren’t Turing complete. If they were, it might destroy the very fabric of space-time. Python has lots of high quality software development tools and a cadre of even higher quality software engineers to those tools. Python may eventually come to subsume a great deal of human communication in the future since Python is more aesthetically pleasing than most human languages.

He also shares a few of his “core political beliefs”:

The only other high level (above assembler) programming languages that should be allowed to exist are C and any open source functional programming language (R, Lisp, Scheme, Haskell, Erlang, etc.). Perl will be retained because having a barbaric freakish culturally dissonant enemy along your frontier produces and maintains asabiya.


  1. A simplified example of a waterfall program can be seen at

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