Isda Launches First Digital Version of CDM

The Isda Common Domain Model 1.0 will offer a digital representation of the events, processes and actions that take place during the lifecycle of derivatives trade, in a machine-readable format.

This model will establish common data and trade processing standards which can be incorporated into various new technologies and infrastructures, including distributed-ledger, cloud, and smart contracts. Its use will enable consistency and interoperability across respective platforms, trading systems and firms—with the ultimate goal of enhancing efficiency and compliance needs.

“The Isda CDM will provide a standardized way to describe events and actions throughout the lifecycle of a trade, enabling the industry to remove much of the inefficiency in current post-trade processes. It will also facilitate the adoption of new, more efficient technologies, such as distributed ledger and cloud,” says Scott O’Malia, chief executive at Isda.

To date, firms have used their own models of events and processes of the trade lifecycle, prompting challenges when it comes to reconciliation or consolidation of various technologies across systems and between counterparties. This announcement outlines that CDM 1.0 is just the initial stage of models development, as Isda intends to collect feedback from associated members in an effort to improve and amend the framework.

“The release of a first digital iteration marks an important step in the development of the CDM, and means Isda members can download and test the model and provide feedback that will lead to further improvements,” O’Malia adds.

The CDM is widely viewed as a cornerstone of widespread efforts to reform trading processes in derivatives markets, many of which were defined in the late 1900s and have changed little since then—often with new processes being handled by software and systems that were not initially built for the task. Isda announced in February that it had selected Regnosys to develop the digital version of the CDM, after a competitive process that saw the startup beat out 15 rivals for the contract.