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10. Use of Expert Judgment

While CoinAPI indexes are designed to be rules-based and objective, we recognize that there may be exceptional circumstances where expert judgment is necessary. This section outlines our approach to the use of expert judgment in index administration.

10.1 Principles of Expert Judgment​

When expert judgment is required, we adhere to the following principles:

  1. Consistency: Expert judgment is applied consistently and in line with the index's stated methodology and objectives.
  2. Transparency: The use of expert judgment is documented and, where appropriate, disclosed to stakeholders.
  3. Objectivity: Decisions are based on factual information and sound reasoning, avoiding personal bias.
  4. Oversight: Significant judgments are subject to review by the Index Oversight Committee.

10.2 Circumstances Requiring Expert Judgment​

Expert judgment may be employed in scenarios including, but not limited to:

  • Extreme market events or disruptions
  • Unanticipated corporate actions in the digital asset space
  • Data anomalies or gaps
  • Interpretation of index rules in novel situations
  • Assessment of new assets for potential inclusion in indexes

10.3 Process for Applying Expert Judgment​

When expert judgment is deemed necessary:

  1. The need for expert judgment is identified and documented by the Index Management Team.
  2. A panel of at least two qualified individuals is convened to assess the situation.
  3. The panel considers all relevant information and potential courses of action.
  4. A decision is made based on consensus, or if consensus cannot be reached, escalated to the Index Oversight Committee.
  5. The rationale for the decision is thoroughly documented.

10.4 Documentation and Record Keeping​

For each instance where expert judgment is applied:

  • A detailed record is maintained, including the circumstances, considerations, and rationale for the decision.
  • Records are retained for a minimum of five years.
  • Documentation is made available for internal audit and, where appropriate, to regulators.

10.5 Disclosure to Stakeholders​

  • Material uses of expert judgment are disclosed to affected stakeholders in a timely manner.
  • The disclosure includes a summary of the decision and its impact on the index.

10.6 Review and Oversight​

  • The Index Oversight Committee regularly reviews the use of expert judgment to ensure it aligns with index objectives and methodologies.
  • Patterns in the use of expert judgment are analyzed to identify potential improvements to index methodologies or processes.

10.7 Limitations on Expert Judgment​

To maintain the integrity and rules-based nature of our indexes:

  • Expert judgment is not used to override explicit rules in the index methodology without proper consultation and disclosure.
  • The frequency and impact of expert judgment are monitored, with the goal of minimizing its use over time through methodology enhancements.

10.8 Training and Competence​

  • Only individuals with appropriate expertise and training are authorized to apply expert judgment.
  • Regular training is provided to relevant staff on the appropriate use and documentation of expert judgment.

By carefully managing the use of expert judgment, CoinAPI aims to maintain the objectivity of our indexes while ensuring they remain relevant and reliable in all market conditions.