Knowledge Decision Services is a leading provider of mortgage data and analytics. Their mission is to develop an open standard analytics platform for analyzing mortgage and asset-backed securities. They have developed a large-scale Network of Systems Architecture and proprietary algorithms for sorting and indexing large datasets. Their goals are to create a widely accepted open standard analytics platform for securities and develop enabling technologies to facilitate peer-to-peer trading of securities across a secure platform based on open standard analytics.

1. Knowledge Decision Services, LL
Prospective Member Presentation
May 17th 2016, New York
Glenn Schultz, COO
Your Role, KDS Global, LLC
@Bond_Lab glenn@kdsglobal.com
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2. About Us:
We are leading provider of mortgage data and analytics to MBS investors, originators, servicers, and
trading desks. Our expertise covers both the agency and non-agency mortgage backed securities
markets.
Mission Statement:
We are committed to developing and open standard analytics platform for the analysis of mortgage and
asset backed securities. We believe the investor should trust the analysis and by extension the software
that produced the analysis; we have a strong responsibility to produce software and results that are
trustworthy and shown as such.
Current Capabilities:
Over the past two decades we have developed a Network of Systems Architecture (NSA) to deliver the
best in class BIG data analytics across our massively parallel computing environment. At the heart of our
NSA is the proprietary and patented virtual sorter and UBiquitous indeX algorithms (UBX™), an enabling
technology allowing us to sort and index every field of every and all sorted data elements within our NSA.
Our cloud computing and thread farms consist of 3,000 CPUs and and over 500 terabytes of data.
Knowledge Decision Services, LLC Moving @ the Speed of Thought

3. Knowledge Decision Services, LLC Moving @ the Speed of Thought
• UBX mathematical and physics modeling and monte carlo simulation libraries.
• UBX middleware.
• UBR™ an implementation of the R language to analyze BIG data sets on our NSA production
environment ubiquitously.
• Bond Lab®, (BLX™) analytical software for the analysis of mortgage-backed and asset-backed
securities written in the R language.
Our Network of Systems Architecture Includes:

4. Knowledge Decision Services, LLC Moving @ the Speed of Thought
Goal #1:
Create a widely accepted open standard mortgage-backed and asset-backed securities analytic
platform to be used by investors, issuers, and investment banks.
Goal #2:
Develop our enabling technologies to facilitate peer-to-peer trading of mortgage-backed and
asset-backed securities across a secure platform based on widely accepted open standard
analytics.
Our Goals:

5. Knowledge Decision Services, LLC Moving @ the Speed of Thought
Goal #1:
Create a widely accepted open standard mortgage-backed and asset-backed securities analytic
platform to be used by investors, issuers, and investment banks.
Bond Lab®
• Is Open Source Analytic software for the analysis for mortgage- and asset-backed securities.
• The inspiration for Bond Lab arose from the recommendation on the part of the Structured
Finance Industry Group to provide humanly readable mortgage and consumer asset-backed
bond payment rules, commonly referred to as the waterfall, in an open source programming
language.
• A human readable waterfall requires commonly agreed upon cash flow engines for
mortgage- and asset-backed securities.
• A single agreed upon source for financial object input.

6. Knowledge Decision Services, LLC Moving @ the Speed of Thought
Bond Lab® was used to write Investing in Mortgage-Backed and
Asset-Backed Securities Financial Modeling with R and Open
Source Analytics, Wiley 2016
Bond Lab® defines the classes, sub classes, super classes,
methods, and functions needed to analyze mortgage- and asset-
backed securities. Current capabilities include:
• Mortgage loan cash flow
• Yield-to-maturity
• Weighted Avg. Life
• Macaulay Duration
• Modified Duration
• Effective Duration
• Convexity
• Effective Convexity
• Key rate duration
• Nelson Siegel
• Nelson Siegel Svensson
• McCulloch cubic spline
• Cox, Ingersoll, Ross
• HJM via restful API
• Agency 30- and 15-year
Prepayment model
• Price/yield
analysis
• Scenario based
total return
analysis
• Option Adjusted
Spread analysis
• REMIC
structuring tool
Proof of Concept: Open Source Mortgage Analytics

7. Knowledge Decision Services, LLC Moving @ the Speed of Thought
Bond Lab®
• Open source the core analytic engines
common to all fixed income valuation.
• Functions,
• Methods,
• Classes
• Agency MBS and structuring classes
are functional
• Consumer ABS and Non-Agency MBS
• Define classes
• Extend cash flow engine
• Extend structuring classes
Symphony
• Integrate with Symphony allowing secure
messaging of analytics dealer to dealer, dealer
to investor.
• Secondary trading real time analytics between
counter parties.
• New issue analytics and deal waterfall files.
• Secure documentation of purchase rational.

8. Knowledge Decision Services, LLC Moving @ the Speed of Thought
Bond Lab®Financial
Object Input
Single provider
of Financial
Object Input
Custom
Prepayment,
Default, Loss
Models
Custom
Prepayment,
Default, Loss
Models
Open source Bond Lab source code
cash flow engines, standardize calcs
Proprietary Prepayment,
Interest Rate models, and
valuation algorithms
Decision Output
Financial Object
Output
Based on
standardized
Input,
cash flow engines,
pmt. waterfalls,
proprietary models
decision output is created

9. Knowledge Decision Services, LLC Moving @ the Speed of Thought
Symphony Messaging Bond Lab®
Transmission of the financial object Metadata of the financial object

10. Knowledge Decision Services, LLC Moving @ the Speed of Thought
• Bond Lab
• A collaborative open source project within the Symphony Software Foundation
• UBX Sorting and Indexing algorithms
• Financial data
• Financial objects
• Hyper ledger – providing documentation of pre-purchase analytics
• Active participation in the development of the Symphony platform
• Financial objects working group
• Development of enabling technologies (R to Symphony – Symphony to R)

11. Knowledge Decision Services, LLC Moving @ the Speed of Thought
Long Term Goal: Peer-to-Peer Trading
Source: TABB Group
The structured products market is the
least sophisticated in terms of electronic
trading followed by:
• HY Corp.
• IG Corp.
• OTR UST.
However, the structured products
markets is the most sophisticated in
terms of structuring and cash flow
analytics.

12. Knowledge Decision Services, LLC Moving @ the Speed of Thought
Long Term Goal: Peer-to-Peer Trading
Source: TABB Group
• Peer-to-peer trading can only be
accomplished once a commonly
accepted and agreed upon cash
flow engines have been developed.
• Buy side investors must become
comfortable with the notion of
market maker. Requires, increased
price transparency.
• Machine learning algorithms can be
used to impute prices given the
meta data of a cusip.
Enabling Technologies
Electronic
RFQ

13. Thanks!
Glenn Schultz, COO
Your Role, KDS Global, LLC
@Bond_Lab glenn@kdsglobal.com
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