Instrument
A bilateral, continuously funded contract between two eligible counterparties, written on a defined and continuously observed measure of an entity’s regulatory, compliance and legal obligations. This page sets out what the underlying is, how it is quantified, how a perpetual differs from a term contract, what each leg receives, and what happens from quote to close.
Descriptive only. Nothing on this page is investment, legal, tax or accounting advice, an offer or solicitation to buy or sell any instrument, a term sheet, or a commitment to quote. Available only to persons who qualify as eligible contract participants under the Commodity Exchange Act. Risk transfer involves the risk of loss and either leg can lose money.
01 — The underlying
Every derivative needs an underlying that both parties can observe the same way. Here it is not a price or an index of prices. It is the set of regulatory, compliance and legal obligations that actually attach to a specific entity — and the burden of carrying them.
The duty
Licences and registrations to hold and renew. Filings and disclosures to make. Capital, conduct, data and reporting standards to meet. Contractual and statutory duties that attach because of what the entity does, where it does it, and who it does it with.
The stream
The obligation set is never static. Rules are made and amended, activities and jurisdictions change, obligations move between states — pending, satisfied, lapsed, disputed, in remediation. What the entity owes is a continuously moving set, which is precisely what makes it referenceable.
The exposure
Satisfying obligations consumes capital, staff, systems, external counsel and management attention, and failing to satisfy them triggers remediation and legal process. That aggregate burden is variable, path-dependent and largely unhedged. It is the exposure the instrument addresses.
The limit
The legal duty itself never transfers. It cannot be assigned, and no counterparty assumes it. The instrument transfers economic exposure to a measure of that duty. The obliged entity remains the obliged entity throughout.
02 — Quantification
An obligation is a legal fact, not a quantity. Turning it into a reference is the hard part of this instrument, and it is done in the open: the perimeter, the register, the construction method and the fallbacks are all agreed in writing before anything trades.
The parties agree the reference perimeter: which entity or defined cohort, which jurisdictions, which obligation classes, and which are excluded. A reference with an unbounded perimeter cannot be settled against, so the perimeter is part of the contract.
For every obligation in scope: what triggers it, what satisfying it requires, its current state, its observation source, and the defined consequence of non-satisfaction. This is the register that Apparently determines and maintains.
Obligation states are combined into a single observable level using a construction method that is published to both parties before trading — including the weighting basis, the observation frequency, and how a change in the register propagates into the level.
What happens when a source is unavailable, when an obligation is disputed, when the perimeter changes because the entity changes, and how a value is determined if the primary method fails. Fallbacks and dispute mechanics sit in the confirmation, not in a conversation after the fact.
A reference level is a measurement of a defined obligation set under a stated method. It is not a credit rating, not a compliance certification, not a legal opinion, and not a finding that any entity is or is not compliant with any law. No level, past or prospective, is published on this site.
03 — Why perpetual
A term contract fixes a window and then forces both sides back to the table. Rules change mid-window; entities change mid-window. A perpetual removes the expiry and replaces the discipline expiry provides with a funding payment exchanged between the two legs.
A perpetual has no maturity, but it is not a position without exit risk. Unwinding, resizing or transferring requires a willing counterparty and is subject to the documentation. Funding continues to be exchanged for as long as the position is open, and can move against either leg. Losses on the underwriting leg are not limited by the funding received.
04 — The two legs
— Origination
You cannot transfer an exposure you cannot state. Apparently states it: it determines what an entity is actually obliged to do, keeps that determination current, and expresses it in a form precise enough to price against. Tomorrow turns that into a contract and a market.
Apparently resolves which regulatory, compliance and legal obligations actually attach to a specific entity — by jurisdiction, activity, licence, and counterparty relationship — and keeps that set current as rules and the entity change. The obligation set is maintained, not snapshotted.
Each obligation is expressed in structured form: what triggers it, what satisfying it requires, what state it is in, and what the defined consequence of non-satisfaction is. Aggregated under a published methodology, that register produces an observable reference level for the entity or a defined cohort.
The reference level is written into contract terms both sides can hold to: what is observed, from what source, at what frequency, how the mark is struck, what happens when an observation is unavailable, and how disputes resolve. A measurement becomes an underlying only once it is defined tightly enough to settle against.
Eligible counterparties take opposite sides of a perpetual swap on that reference. The position is continuously marked, funded periodically between the two legs, collateralised under negotiated documentation, and can be resized, offset, transferred or unwound without waiting for an expiry.
Apparently is a separate data and determination service. It is not a law firm and does not provide legal advice. A reference level built from obligation data is a measurement under a disclosed methodology — not a credit rating, a compliance certification, or a finding that any entity is or is not compliant with any law.
06 — Lifecycle
Access is by application. Identity, jurisdiction, entity type and eligible contract participant status are established before any pricing conversation. If a party is not eligible, the conversation stops there.
The entity or cohort, jurisdictions, obligation classes in scope and out, the observation sources and the construction method are specified and agreed in writing. Both parties see the same definition.
The prospective payer states what it will write, at what size and on which references. An indication is assembled against that appetite. An indication is not a quote, not a commitment, and not an offer.
A negotiated master agreement and a trade confirmation naming the reference, the funding convention and interval, the threshold, the mark source, the credit support terms, the fallbacks and the dispute mechanics. Both parties take their own legal, tax and accounting advice.
The trade is executed bilaterally between the two named counterparties. Tomorrow provides the venue, the reference and the record. It is not a counterparty to the trade and does not act as broker, dealer or adviser to either side.
The reference updates as Apparently maintains the obligation set. The position marks continuously. Funding is exchanged at the stated interval and collateral moves under the credit support terms. Every observation, mark and lifecycle event is recorded as it happens.
Size can be increased or reduced, the position can be offset against opposing appetite on the venue, or transferred, subject to the documentation and to counterparty availability. There is no expiry forcing any of these.
The position is unwound at the prevailing mark or transferred. Final funding and collateral are settled between the parties, and the full record — reference construction, marks, funding, lifecycle events — is retained and available to both sides for valuation review and audit.
07 — Boundaries
Where a characterisation is uncertain we say what the instrument is, rather than claiming a regulatory box it may not sit in.
08 — Standing and disclosure
Tell us which leg you would take and what you would want the reference to cover. We will tell you plainly whether the instrument is useful to you yet, and where it is not.
Applying is not an offer to trade and does not create a relationship. Eligibility, including eligible contract participant status, is assessed before any pricing conversation.
