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Corda Network Foundation : Governance Guidelines
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====================================================
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================================================
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23 October 2018
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@ -11,7 +11,7 @@ This is a set of governance guidelines for the Corda Network Foundation. It prov
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Board, to steer and govern Corda Network effectively to realise its potential. It is not a set of binding legal obligations.
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1 Background to Corda and the Network
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=====================================
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-------------------------------------
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Corda allows multiple independent applications and private networks to coexist, each with their own business models and
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membership criteria, yet linked by the same underlying network (‘Corda Network’). This Network enables ‘interoperability’,
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@ -23,7 +23,7 @@ specified in the Corda Open Source Project codebase, but later may be formalised
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which then will become canonical.
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1.1 Reason for a Corda Network Foundation
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-----------------------------------------
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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R3 has set up and governs by default Corda Network currently (along with Corda). This includes making key decisions
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around establishing, maintaining and updating standards, policies, and procedures for participation in, and use of,
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Corda Network.
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@ -41,10 +41,10 @@ In other words, to achieve the community's objective of Corda ubiquity, it is n
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structure which explicitly limits R3’s control of Corda Network, and enables this ubiquity.
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2 The Corda Network Foundation
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==============================
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------------------------------
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2.1 Mission and Values
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----------------------
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^^^^^^^^^^^^^^^^^^^^^^
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Following on from the Corda introduction and technical white papers, we see the mission of the Corda Network Foundation
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to achieve the vision of Corda - whereby the state of transactions and agreements of business partners can be recorded
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in a single global database, ending the need for costly reconciliation and error correction, while maintaining privacy.
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@ -85,7 +85,7 @@ developers, service and solution providers and end users.
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customers, open source developers, and R3’s shareholders.
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2.2 Structure of the Foundation
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-------------------------------
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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The Foundation shall be a not-for-profit entity created exclusively to execute the mission set out in this Constitution.
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With the advice of international lawyers, this is a ‘Stichting’ domiciled in Holland – a legal entity suited for
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governance activities, able to act commercially, with limited liability but no shareholders, capital or dividends.
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@ -112,10 +112,10 @@ and with privileges and responsibilities as set out in section 6.
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Any change to the structure of the Foundation is a constitutional change, described in section 5.1.
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3 Governing Board
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=================
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-----------------
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3.1 Role of the Board
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---------------------
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^^^^^^^^^^^^^^^^^^^^^
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The goal of the Board is primarily to ensure the stable and secure operation of the Network, as well as to achieve the
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vision of Corda laid out in section 2.1. The fundamental responsibility of directors appointed to the Board is to
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exercise their business judgement to act in what they believe to be the best interests of the Network, taking account
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@ -129,7 +129,7 @@ The Board is the formal decision-making authority of the Foundation, and actions
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decision making.
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3.2 Relationship of the Board with the Operator
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-----------------------------------------------
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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It is the duty of the Board to monitor the Operator’s performance to ensure that the Network operates in an effective,
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efficient and ethical manner. The Board will also be responsible for overseeing the Operator in the development of the
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Network’s strategic and tactical plans, ensuring that they will result in broad and open adoption of Corda. The Operator
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@ -137,7 +137,7 @@ is responsible to the Board for the execution of day to day operations, and the
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change.
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3.3 Composition and Establishment of the Board
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----------------------------------------------
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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### 3.3.1 Size
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The Board shall consist of 11 voting members (‘Directors’) in total, to allow broad representation but maintain an agile
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decision-making ability. The selection process (using the Participant Community) is intended to ensure that the Board is
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@ -212,7 +212,7 @@ board meetings of more than six months, death, or if necessary, removal by a Man
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vacant seat will be contested at the next annual election.
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3.4 Conduct of Board Meetings
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-----------------------------
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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Attendance may be in person or by video-conference.
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The Board shall meet not less than every six months, and may meet on the request of any Director, but not more than every
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@ -236,7 +236,7 @@ observer per unrepresented Participant. Observers may participate in discussions
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vote, and may be asked to join by video-conference if there are logistical constraints.
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4 Relation of the Foundation to Business Networks
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===================================================
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---------------------------------------------------
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The global Network shall support the operation of any business networks which may be formed by industry-specific
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operators on top of the Network. The Board shall ensure that there is a clear separation between areas of governance
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@ -247,14 +247,14 @@ under a Creative Commons license, both for reuse by business network operators i
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governance structure, and so that such governance layers are complementary and not contradictory.
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5 Governance Events
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=====================
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---------------------
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All formal changes to the Network and the Foundation shall be controlled through a formal Governance Event process, and
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the right to initiate this shall be held by all Directors and Participants. In the event of disruptive behaviour by an
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individual Participant or group of Participants, this right may be curtailed, as described in 5.2.5.
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5.1 Types of Governance Events
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------------------------------
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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There are three types of change that affect the Network and the Foundation, which require a controlled change process
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and a vote described in 5.5, and are defined as Governance Events:
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@ -280,7 +280,7 @@ Advisory Committee to provide due diligence and make a recommendation for implem
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For all Governance Events, decisions and the rationale for the decision shall be published transparently.
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5.2 Mandatory Governance Events
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-------------------------------
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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### 5.2.1 Access Standards
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The Corda system can be accessed by using software which implements the set of technical protocols which define
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compatibility (see 5.3.1) above). The reference implementation of this software is open source and freely accessible at
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@ -347,7 +347,7 @@ Change to the arbitration and dispute resolution process shall be the subject of
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Policies covering areas of operation not covered by the Constitution (e.g. code of conduct for Board Directors).
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5.3 Advisory Governance Events
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------------------------------
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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#### 5.3.1 Technical Standards
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There is a set of technical standards, such as ‘network parameters’, which all Corda Network nodes need to comply with
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in order to guarantee technical compatibility to other nodes and services within the Network. While Corda has stability
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@ -384,7 +384,7 @@ business network operator, or directly if no business network is involved. If ne
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the Board by creating an Advisory Governance Event.
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5.4 Emergency Governance Events
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-------------------------------
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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Certain Network incidents, which could impact one or more Network participants and that would be the subject of
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Mandatory or Advisory Governance Events, shall require immediate resolution. In these cases, the Operator may make
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emergency changes, but these shall be subject to post-event evaluation and standard Governance Event processing. Areas
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@ -392,7 +392,7 @@ of control that are the subject of Mandatory Governance Events are not expected
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the Operator shall be entitled to make emergency changes to preserve the stability and integrity of the Network.
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5.5 Voting
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----------
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^^^^^^^^^^
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All Constitutional, Mandatory and Advisory Governance Events outlined in sections 5.2 and 5.3 shall be presented to the
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Board for voting. The representatives of the Board shall vote on a one vote per Director basis to approve or reject the
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Governance Event.
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@ -416,10 +416,10 @@ in an attempt to simplify governance, provide transparency and lower costs, prov
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thoroughly and has sufficient manual override controls.
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6 Participation
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=================
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-----------------
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6.1 General Membership
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----------------------
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^^^^^^^^^^^^^^^^^^^^^^
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Participation is open to any potential participant on the Network, subject to meeting normal Network access conditions
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described in section 5.2.1, and paying a nominal annual participation fee to cover both the operational costs of Network
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services and the Foundation, and to ensure that its activities are sufficiently resourced.
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@ -437,7 +437,7 @@ costs will depend on the individual event.
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8. Use the Network for live business activities running 'in production'.
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6.2 Technical Advisory Committee
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--------------------------------
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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The Technical Advisory Committee shall have limited participants appointed directly by the Board. Its mandate and
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charter will be set by the Board. It shall act directly on the instructions of the Board or the Operator, which shall
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set expected deliverables and timelines. It shall focus on specific technical topics and may have responsibility for
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@ -452,7 +452,7 @@ the operation of the Network.
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elegant and practical system design
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6.3 Governance Advisory Committee
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---------------------------------
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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The Governance Advisory Committee shall have limited participants appointed directly by the board. Its purpose is to
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recommend actions to the Board for approval on non-technical matters, where additional support is helpful. This may
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include decisions on:
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@ -464,7 +464,7 @@ include decisions on:
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5. Complaints and Whistle-blowing
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7 The Corda Network Operator
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============================
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----------------------------
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In order to pursue the mission of the Foundation as set out in section 1, there will need to be a set of operational
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activities, including technical activities such as hosting services, marketing activities, community management and
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@ -480,10 +480,10 @@ have been designed to be highly cacheable, and low-cost in operation.
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For the first three years, R3 shall act as the Operator.
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8 Costs and Participation Fees
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==============================
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------------------------------
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8.1 Costs
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---------
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^^^^^^^^^
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In line with the mission and values of the Foundation, the Network Foundation is not a profit seeking entity. But the
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Foundation needs to provide governance and technical services, and these will incur costs. The Foundation maintains these
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cost principles, as ideals but not contractual standards:
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@ -496,7 +496,7 @@ of all of its own administration, governance and technical services.
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5. The Foundation's cost model should be public, to demonstrate that the costs could not reasonably be lower.
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8.2 Participation Fee
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---------------------
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^^^^^^^^^^^^^^^^^^^^^
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The Foundation shall meet costs by levying a participation fee and notary fee for all Participants. The participation
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fee will be independent of organisation size and number of transactions on Corda, to reflect the underlying cost of
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identity issuance.
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@ -520,13 +520,13 @@ The fee applies even if the Participants chooses not to operate a Corda node on
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can be potential or active participants.
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8.3 Notary Fee
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--------------
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^^^^^^^^^^^^^^
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Transaction notary fees will be charged separately, on a per-use basis. This reflects the variable cost of providing
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notary services, with a wide orders-of-magnitude disparity between frequent and infrequent participant transaction
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volumes. As a principle, notary fees shall not subsidise participation fees, nor vice versa.
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9 Community
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===========
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-----------
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Corda is a collaborative effort, and part of the Foundation’s mission is to help create and foster a technical community
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that will benefit all Corda solution providers and users. As such, the Foundation will work to encourage further
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participation of leading Participants of the ecosystem, including developers, service and solution providers and end
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@ -537,7 +537,7 @@ The Corda technical community should be broad and open, encouraging participatio
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technology and applications, but this cannot be mandated by the Foundation.
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9.1 Non-Discrimination
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----------------------
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^^^^^^^^^^^^^^^^^^^^^^
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The Foundation will welcome any organization able to meet the Participation criteria, regardless of competitive
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interests with other Participants. The Board shall not seek to exclude any Participant for any reasons other than those
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that are reasonable, explicit and applied on a non-discriminatory basis to all Participants.
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