CDM for repo and bonds

ICMA is cooperating with ISDA, ISLA and REGnosys to extend the development of the Common Domain Model (CDM) to include repo and, by extension, outright bond transactions. The CDM is a single, common digital representation of securities trade events and lifecycles intended to enhance standardisation 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 the 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 for repo and bonds

In cooperation with other industry bodies, ICMA is expanding the CDM to encompass repo and bond markets. As with derivatives and securities lending, the expected benefits to the repo and bond 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’s CDM Steering Committee (SteerCo) brings together member firms who are willing to contribute to this cross-industry initiative. The SteerCo provides guidance throughout the modelling phases and provides sample electronic records and database schemas to enhance and test the CDM design and outputs. A wider working group of sell-sides, buy-sides, trading venues and technology also providers support and feedback toward the development of the CDM for repo and bonds. The working group includes front office, middle/back office, IT and legal experts.

If member firms would like to be engaged in this important cross-industry initiative, or would simply like to learn more, they are encouraged to contact the ICMA team.


ICMA fact sheets – CDM for repo and bonds at a glance
 
CDM for repo and bonds factsheet ICMA July 2021 CDM for repo and bonds factsheet for implementation ICMA July 2021

ICMA virtual event

Common Domain Model (CDM) for repo and bonds, 21 July

The initial phase of ICMA’s project to model and develop the CDM for repo and bonds will be completed this July and presented in a virtual event on 21 July. This virtual event, open to all interested market participants, will include:
  • An introduction to the ICMA CDM project
  • Demonstration of the CDM in action
  • Discussion by panel of industry participants from the project Steering Committee of the implementation process and its benefits.
Register here


ICMA media resources
 
What is the Common Domain Model webinar - ICMA What is the Common Domain Model?
In this webinar presentation, ICMA’s Gabriel Callsen gives an update on the the CDM project for repo and bonds, the scope of the project, milestones and deliverables and the role of the Steering Committee of members.
Download the presentation
The Common Domain Model – fundamentals & genesis - ICMA Podcast The Common Domain Model – fundamentals & genesis
In this podcast, Dr Lee Braine, Director of Research and Engineering in the Chief Technology Office, Barclays talks to ICMA Chief Executive, Martin Scheck about the Common Domain Model, how it digitises life cycle events to address the problems of inconsistent processes and data and its application to derivatives, bonds and repo. They also discuss the challenges for its adoption in capital markets.

News and updates

7 October 2020
Presentation on the CDM for repo and bonds by Gabriel Callsen at the ERCC AGM

8 April 2020
The ERCC launched webinars to bring members and the wider market up-to-date on key topics that have impacted the repo market. The webinars include  a discussion on ICMA’s ongoing collaboration with ISDA to extend the Common Domain Model (CDM) to SFTs, building a standardised digital representation of repos.
View the webinar  |  Download the presentation

6 April 2020
Summary of CDM Repo Workshops by Gabriel Callsen, published in the ICMA Quarterly Report Q2-2020.

16 March 2020
3rd ICMA/ISDA CDM Repo Workshop. Modelling and running a live demo of fundamental features of a repo transaction ie the execution comprising transfer of collateral and cash of both legs in the CDM. See supporting materials.

14 February 2020
2nd ICMA/ISDA CDM Repo Workshop. Advanced modelling  and live implementation of open repo and lifecycle components in the CDM. See supporting materials.

27 January 2020
ICMA/ISDA CDM Repo Workshop. The workshop focused on modelling open repos, and, as an initial use case for corporate actions, collateral coupon payments. The aim was to demonstrate the benefits of a consistent data model in machine-readable format, using a hands-on format which showed  a real-time implementation. The workshop is the first of a series. See presentation of the first part of the workshop.

16-17 October 2019
ICMA partnered with ISDA, Regnosys and others to support the Barclays DerivHack 2019. The objective was to build on the successful ‘CDM hackathon’ from 2018 to extend the simulation to post-trade processing of securities. There were seven use cases that aimed to model the typical steps of a front-to-back trade flow covering trade execution, allocation, affirmation, confirmation, settlement, position reports, and collateral events. See report published by EY.

10 October 2019
Common Domain Model: the path to efficiency By Ian Sloyan (from the ICMA Quarterly Report Fourth Quarter 2019).


CDM links and resources:


ISDA & ICMA: CDM for Repo
What is the ISDA CDM?
ISDA CDM 2.0
The Field Effect: CDM FAQ
Barclays White Paper on Industry Adoption Scenarios for Authoritative Data Stores using the ISDA Common Domain Model (14072020)




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

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

Gabriel Callsen
Director, Market Practice and Regulatory Policy
Direct line: +44 20 7213 0334

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