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Common Domain Model (CDM)
CDM for repo and bonds

ICMA is cooperating with ISDA to extend the development of the Common Domain Model (CDM) to include repo and, by extension, outright bond transactions: a single, common digital representation of securities trade events and lifecycles intended to enhance standardization and facilitate interoperability across firms and platforms. The development of the CDM for all financial markets and securities will be critical in creating cross-industry efficiencies while easing the development and adaptation of new technologies.

What is CDM?

The ISDA CDM has been designed as an industry solution to tackle the lack of standard conventions in how derivatives trade events and processes are represented. Developed in response to regulatory changes, high costs associated with current manual processes, and a demand for greater automation across the industry, the ISDA CDM establishes a common blueprint for events that occur throughout the derivatives lifecycle, paving the way for greater automation.

Essentially the CDM creates common building blocks in machine readable format that can be used by all businesses and processes within a firm, or across the entire industry. The benefit is to recreate and represent any individual securities transaction or lifecycle event in an entirely consistent and replicable way, deriving exactly the same cashflow outputs. This immediately facilitates the potential for interoperability not only between firms’ various internal systems (quoting, transaction execution, reconciliations, settlement, risk management, regulatory reporting, data analysis), but also between different firms and market infrastructures (trading venues, OMS/EMS, CSDs, CCPs, Trade Repositories).

CDM and bonds & repo

In cooperation with other industry bodies, ISDA is looking to expand the CDM to other markets and asset classes. ICMA has embraced the opportunity to partner with ISDA in developing the CDM to encompass bond and repo markets.  As with derivatives, the expected benefits to the bond and repo markets will be:
  • Greater internal efficiencies for firms’ various processes and IT applications: e.g. trade execution, risk management, regulatory reporting, trade confirmation, reconciliations and settlement.
  • Enhanced interoperability between market infrastructures, including trading venues, order/execution management systems, CSDs, CCPs, and trade repositories.
  • Consistency of regulatory transaction and trade reporting (MiFIR / SFTR).
  • A common foundation for developing new technologies such as distributed ledger and cloud services.
How to be involved

ICMA has created a working group of sell-side members to help support the development of the CDM for bond and repo markets. The working group includes front office, middle/back office, IT and legal experts. In cooperation with ISDA, firms are helping to provide sample electronic records of trades and/or database schemas both to enhance and test the CDM design and outputs.

If member firms would like to be engaged in this important industry initiative, or would simply like to learn more, they are encouraged to contact the ICMA team. Buy-sides, trading venues, and other market infrastructures may also see an advantage in being involved in these early stages.


CDM links and resources:


ISDA & ICMA: CDM for Repo
What is the ISDA CDM?
ISDA CDM 2.0
The Field Effect: CDM FAQ




Contacts:

Andy Hill
Senior Director, Market Practice and Regulatory Policy; secretary to the Secondary Market Practices Committee and also responsible for overseeing repo policy.
Direct line: +44 20 7213 0335
EMAIL | DOWNLOAD BUSINESS CARD

Alexander Westphal
Director, Market Practice and Regulatory Policy, secretary to the ICMA European Repo and Collateral Council and Committee (ERCC) and ERCC Operations Group.
Direct line: +44 20 7213 0333
EMAIL | DOWNLOAD BUSINESS CARD

Gabriel Callsen
Director, Market Practice and Regulatory Policy
Direct line: +44 20 7213 0334
EMAIL | DOWNLOAD BUSINESS CARD