On August 2, the International Swaps and Derivatives Association, Inc. (ISDA), the International Capital Market Association (ICMA) and the International Securities Lending Association (ISLA) signed a memorandum of understanding (MoU) with the aim to reinforce their collaboration on development of the upcoming Common Domain Model (CDM).
The CDM will create a standardized digital representation of trade events and actions across the lifecycle of financial products with the goal to enhance risk management through alignment between contracts, processes and data, and the introduction of real-time regulatory oversight.
ISDA points out the various efforts that are currently underway including:
ICMA/CDM Steering Committee completion of the initial phase of its CDM project for repo and bonds providing a ‘single, unambiguous representation of the execution, clearing and settlement of a fixed-term repo transaction, as well as a bond transaction’.
The upcoming adoption of the CDM via a digital regulatory reporting initiative for new rules required by the Commodity Futures Trading Commission (CFTC) and the European Securities and Markets Authority (ESMA).
CDM development to be implemented into "ISDA Create", a platform enabling firms to negotiate and execute credit support annexes (CSA) and other collateral related documentation online.