CDM for repo and bonds

ICMA has completed phase 1 of the CDM for repo and bonds in July 2021, in partnership with REGnosys. The project delivered an extension of ISDA’s CDM covering execution, clearing and settlement of a fixed-term repo transaction, as well as a bond transaction, in machine readable and executable form.

The CDM for repo and bonds is now available to ICMA member firms. To gain access, members should:
The CDM is a joint initiative between ICMA, ISDA and ISLA. Adoption of the CDM will be critical in creating cross-industry efficiencies and cost savings while easing integration of new technologies.

What is the CDM?

The CDM provides a single, common digital representation of trade events and actions across the lifecycle of repo and bonds, securities lending and derivatives, intended to promote standardisation and facilitate interoperability across firms and platforms.

Why was the CDM developed?

The CDM was initially designed by ISDA as an industry solution to tackle the lack of standard conventions in how derivatives trade events and processes are represented. Key drivers are regulatory changes, high costs associated with current manual processes, and a demand for greater automation across the industry.

What are the benefits of the CDM?


Essentially, the CDM creates common building blocks in machine readable and executable format that can be used by all businesses and processes within a firm and across the entire industry. This enables any individual securities transaction or lifecycle events to be represented and processed in an entirely consistent way, deriving exactly the same cashflow outputs. ‘Speaking CDM’, or a common language, is expected to generate key benefits to the repo and bond markets, notably:
  • Greater internal efficiencies for firms’ various processes and IT applications: e.g. quoting, trade execution, reconciliations and settlement, risk management, regulatory reporting, data analysis.
  • Enhanced interoperability between market infrastructures, including trading venues and order/execution management systems, CSDs, CCPs, and trade repositories.
  • Consistency of regulatory reporting (eg MiFIR / SFTR).
  • A common foundation for developing new technologies such as distributed ledger and cloud services.
CDM for repo and bonds: initial phase (February – July 2021)

ICMA, together with its CDM Steering Committee, has concluded in July 2021 the initial phase of its CDM project for repo and bonds, which provides a single, unambiguous representation of the execution, clearing and settlement of a fixed-term repo transaction, as well as a bond transaction. Please see showcase event and materials below.

How to be involved

The CDM is an open source project and ICMA intends to make the CDM for repo and bonds publicly available in due course, merging the ICMA model with ISDA’s CDM for derivatives, which includes contributions for securities lending by ISLA. In the interim, ICMA member firms are invited to use and provide feedback on the CDM for repo and bonds, which is currently available in a private environment.

Please get in touch with us if you would like to contribute to this important cross-industry initiative going forward, or would simply like to learn more.


ICMA fact sheets – CDM for repo and bonds at a glance
 
ICMA - CDM for repo and bonds - Factsheet - October 2021 ICMA - CDM for repo and bonds - Factsheet for Implementation - October 2021

ICMA media resources
 
Common Domain Model (CDM) for repo and bonds webinar - ICMA Common Domain Model (CDM) for repo and bonds
21 July 2021 This virtual event provides a round-up of ICMA’s CDM project for repo and bonds, including demonstrations of the CDM in action, as well as a panel discussion with members of ICMA’s CDM Steering Committee on key take-ways from the project, the path to implementation and next steps.
Download the presentations by ICMA’s Gabriel Callsen and REGnosys.
Shorter, individual CDM Demonstrations from the event are also available here:
An introduction to Rosetta by REGnosys (5 mins)
CDM in action – execution, clearing and settlement of a repo transaction by FINXIS LLC (8 mins)
What is the Common Domain Model webinar - ICMA What is the Common Domain Model?
30 March 2021 In this webinar presentation, ICMA’s Gabriel Callsen gives an update on 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
12 November 2020 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

12 October 2021
Digital representation of transactions: CDM for repo and bonds by Gabriel Callsen, published in the ICMA Quarterly Report Q4-2021.

2 August 2021
ICMA, ISDA and ISLA sign MoU on the Common Domain Model to strengthen collaboration between them on the future development of the CDM

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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