The Common Domain Model (CDM) is a standardized, machine-readable and machine-executable model that represents financial products, trades in those products and the lifecycle events of those trades.

 

Key Benefits

The CDM is a standardized data and process model for how financial products are traded and managed across the transaction lifecycle. This creates transparency and consistency, encouraging automation and interoperability and reducing the errors and costs associated with manual processes.

 

Contact

For more information about the CDM or to access the model, click here or visit the CDM website.

To find out more about how the CDM is being applied in derivatives markets, email the ISDA team at CDMDRR@isda.org.

 

About the Common Domain Model

Over time, each firm has established its own systems and its own unique set of representations for events and processes that occur during the life of a trade. There is no commercial advantage to organizations maintaining their own representations, as it results in firms having to continually reconcile their trades to make sure they have the same information – a big drain on resources. It also curtails the potential for greater automation, and results in increased operational risk.

The CDM tackles this problem by establishing standard representations for how financial products are traded and managed across the transaction lifecycle, enhancing consistency and facilitating interoperability across firms and platforms.

Now hosted by FINOS, the CDM is developed through the community specification open governance process, and underlying code assets are released under the Community Specification License 1.0.

 

Features

  • Enhances consistency and interoperability across the industry, reducing reconciliation and promoting straight-through processing.
  • Enables efficient trade processing of repo, securities lending, bond and derivatives transactions.
  • Promotes transparency and alignment between regulators and market participants, reducing the resources associated with regulatory compliance.
  • Creates an environment for innovation in financial markets. The CDM will speed up development of new solutions for the market by allowing providers to focus on what they specialize in rather than requiring them to interpret and represent market events and processes individually.

 

Applications in the Derivatives Market

  • The CDM is being used as the basis for ISDA’s Digital Regulatory Reporting (DRR) initiative, which transforms a mutualized industry interpretation of derivatives trade reporting requirements into human-readable, machine-executable, open-access code. Visit the ISDA DRR InfoHub for more information.
  • This reduces the need for firms to dedicate significant resources and budget to interpreting new rules and building reporting logic from scratch. It also improves the quality of reported data, resulting in cleaner data for regulatory aggregation, use and analysis to effectively evaluate systemic risk.
  • More information on ISDA’s DRR initiative is available here. Alternatively, contact the ISDA team at CDMDRR@isda.org.
  • The CDM is also being used to increase automation in collateral management processes to improve efficiency, reduce the time it takes to get a client relationship up and running and cut operational and liquidity risks.
  • Current use cases include work with the International Capital Market Association and the International Securities Lending Association to develop collateral representations across derivatives, repo and securities lending, which will reduce onboarding time and improve interoperability and collateral optimization processes.
  • More information on the CDM for collateral initiatives use cases is available here. Alternatively, contact the ISDA team at collateralinitiatives@isda.org.

 

Resources

Collateral

Digital Regulatory Reporting (DRR)

 

Fact Sheets/Presentations

 

Press Releases/Blogs

 

Webinars/Videos