This cordapp is an example of how blockchain can work in the capital market industry. Due diligence is commonly the first step of any action in the capital market. In many of the industry, it is also required by the regulators to prevent fraudulent and risky transactions. Each firm will have its own due-diligence process and standards, but at the same time, the cost of executing due diligence is also bared by them individually.
The above picture is a high level mock overview of a shareable due diligence DLT app. BankA will initiate the original Corporate Records auditing with an autitor. Then it will share the auditiing report with BankB to save BankB's cost on getting the same report. Wise versa, BankB can work with a different auditor and produce a different report and share with BankA. In the implmentation of this sample cordapp, we will only cover one type of the file auditing.
Notes: another key feature of this app is whitlisting trusted auditors. It is done by utilizing attachment function in Corda. More samples on how to use attachment can be found in the Features samples folder
Deploying nodes: ./gradlew clean deployNodes
Starting the nodes: ./build/nodes/runnodes
Uploading whitelisted Auditors: ./gradlew uploadWhitelists
Step #1: At PartyA, file the original Corporate Records auditing process with Auditor(Trusted Auditor)
flow start RequestToValidateCorporateRecordsInitiator validater: Trusted Auditor, numberOfFiles: 10
Step #2: Go to the Trusted Auditor Node, validate the auditing request(This step symbolize the auditing process by this third party auditor). Put in the linearId which was returned in Step #1.
flow start ValidateCorporateRecordsInitiator linearId: <XXXX-XXX-XXXX-XXXXX-XXXXXX>
Step #3: Go to PartyA, Do a query to confirm that the request has been validated. You should see the variable qualification=true.
run vaultQuery contractStateType: net.corda.samples.duediligence.states.CorporateRecordsAuditRequest
Then, we will instruct PartyA to share a copy of the auditing result with PartyB: (Again, You would need put in the linearId returned from Step #1). The parameter trustedAuditorAttachment is a jar file which records the trusted auditors. If PartyA used an untrusted auditor to accquire the corporate records auditing report. He will be prohibited to share with anyone because it is valueless effort(in this business use case, Of course you can modify the business use cases).
flow start ShareAuditingResultInitiator AuditingResultID: <XXXX-XXX-XXXX-XXXXX-XXXXXX>, sendTo: BankB, trustedAuditorAttachment: "8DF3275D80B26B9A45AB022F2FDA4A2ED996449B425F8F2245FA5BCF7D1AC587"
This flow will return the LinearId of the copy of auditing report, you would need this in Step #6.
Step #4: Go to PartyB, do a query to confirm the delievery of copy of the Auditing Report.
run vaultQuery contractStateType: net.corda.samples.duediligence.states.CopyOfCoporateRecordsAuditRequest
As of now, the sharing of the trusted auditing report is done. What left now for both PartyA and PartyB in this use case is to upload the Corporate Records auditing report into a due-diligence list, which they can share with a regulator.(You can again alter this step to suit any other use cases).
Step #5: Go to PartyA, Attach the Corporate Records auditing report into a due-diligence checklist and report to the Regulator. Again, the approvalId is the linearId returned in Step #1.
flow start CreateCheckListAndAddApprovalInitiator reportTo: Regulator, approvalId: <XXXX-XXX-XXXX-XXXXX-XXXXXX>
Step #6: Go to PartyB, Attach the copy of the Corporate Records auditing report into a due-diligence checklist and report to the Regulator. You would need the linearId that is return from Step #5
flow start CreateCheckListAndAddApprovalInitiator reportTo: Regulator, approvalId: <XXXX-XXX-XXXX-XXXXX-XXXXXX-Returned-From-Step #5>
Step #7: Go to Regulator, do a query on reported due-diligence checklists. You will be able to see both PartyA and PartyB had filed a due-diligence checklist.
run vaultQuery contractStateType: net.corda.samples.duediligence.states.DueDChecklist
This use of Distributed technology Corda helped PartyB saved the cost of go through corporate records due-diligence process while still reaching a trusted auditing report.