In 2017, ISDA embarked on a project to develop the ISDA Common Domain Model (ISDA CDM™), a common, robust, digital blueprint for how derivatives are traded and managed across their lifecycle. This would provide a standard upon which existing and emerging technologies such as distributed ledger, cloud and smart contracts can be built. These common standards aim to enable and/or accelerate greater automation and efficiency in the derivatives market while facilitating interoperability across firms and platforms.
In this ISDA CDM™ 1.0 version, ISDA has set out, in a machine-readable format, a standard digital representation of events and actions that occur during the life of a derivatives trade. It is based on the design principles specified as part of the ISDA’s October 2017 CDM concept paper for a product scope limited to simple interest and credit derivatives products and an agreed sample of business events. By publishing this initial baseline, ISDA is looking for feedback and validation from market participants in order to refine the model. ISDA also anticipates working on proofs of concept that demonstrate various applications of the CDM.
The release package includes the following components:
- The latest representation of the model that expresses the data and associated rule logic in machine-readable documents:
- Human readable textual format using formal syntax;
- Automatically generated application program interface (API); and
- Programmatic code of Java classes for the set of data component defined by the model packaged within Java archive in .jar format along with the corresponding source code and upstream dependencies of the generated Java classes in .jar format.
- The digital representation of the ISDA definitions for interest calculations using the model to demonstrate its ability for transcribing legal documentation into machine-readable format using the CDM syntax;
- Projections of trade representation of interest rate derivatives, credit derivatives and related options in JSON format leveraging org sources;
- Projections of events per the model scope in JSON format leveraging manufactured event data produced by the CDM Design working group;
- Documentation in .html format to detail the key principles of the model, the syntax adopted in this initial phase, the inference logic to support the construction of derivatives products using the composite approach of the model;
- A short README section providing initial explanations on the structure of the packaged snapshot.
While the release package provides an overview of what has been achieved so far, members should note that it remains a snapshot of the ISDA CDM™. Work to develop the model is continuing and this artefact will be updated accordingly. For the most recent view of the model and answers to questions, members should reach out to the MarketInfrastructureandTechnology@isda.org or the ISDA press office and join the ISDA CDM design working group.
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