Digital Regulatory Reporting (DRR) using the Common Domain Model (CDM) is a global, collaborative industry initiative led by ISDA which uses technology to enable efficient implementation of trade reporting rules and rule amendments of multiple global jurisdictions.

The purpose of this information hub (“InfoHub”) is to provide introductory information about the DRR using the CDM:

  1. Background
  2. Introduction
  3. Key Objectives
  4. Potential Benefits of DRR using the CDM
  5. How are Trade Reporting Rules developed for DRR?
  6. DRR has been successfully implemented
  7. ASIC and MAS Digital Regulatory Reporting (DRR): ISDA Webinar
  8. Demo of DRR
  9. Target DRR Development Timelines
  10. Community-driven ISDA Governance
  11. Fact Sheets and Press Releases

For more information regarding the Common Domain Model (CDM), please visit the ISDA CDM InfoHub


1. Background 

Global authorities had previously completed the valuable work to standardize the definitions, format and allowable values for a key set of data elements, as a result of the G20 Leaders’ 2009 Pittsburgh Summit commitment to improve the OTC derivatives markets with a goal to improve transparency, mitigate systemic risk and protect against market abuse.  OTC trades should be reported to trade repositories (TRs).

The Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO) published a set of globally harmonized definitions, format and allowable values for key OTC data elements for the:

  • Unique Product Identifier (UPI)
  • Critical Data Elements (CDE)
  • Unique Transaction Identifier (UTI)

The global harmonization work was an important step towards more effective data aggregation, however DRR using the CDM could further improve the consistency of the data reported.  The cost and complexity of building changes to jurisdictional rules to adopt the global harmonization guidance has raised substantial implementation challenges for market participants.  Such challenges can be mitigated through use of the CDM, which makes it an opportune time for the CDM use-case of Digital Regulatory Reporting, as major changes to trade reporting rules are or will be implemented over the next two to three years.

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2. Introduction

DRR is a digitized representation of trade reporting rules and market practices based on a mutualized industry interpretation. Digitized data elements required for reporting can be used for submission to trade repositories.  Regulated entities will be able to implement new and amended regulatory reporting rules using an industry-led standardized interpretation of the requirements as free, machine-executable, open-access code.
Ultimately, DRR will allow regulators to publish reporting rules as executable code that can be automatically read and interpreted by the technological systems of reporting entities, therefore improving and streamlining the reporting process for all asset classes.

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3. Key Objectives

Key objectives of the DRR include the following:

  • Provide a digitized representation of jurisdictional trade reporting rules through a single, standardized set of unambiguous. machine-executable, open-access code;
  • Digitize reportable data elements for submission as code to trade repositories;
  • Provide digitized representations that are extensible and therefore can be re-used for rules in other jurisdictions with the same requirement.
  • Facilitate implementation of new requirements such as the ISO 20022 or UPI.

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4. Potential Benefits of DRR using the CDM

DRR can provide numerous benefits to those in scope for reporting, CCPs, trade repositories, technology, data and services vendors, and even the regulatory community, including:

  • Facilitates efficient and consistent implementation across trade reporting jurisdictions of the globally harmonized recommendations, including CDE, UPI, UTI, and LEI;
  • Decreases inconsistencies in the way individual institutions interpret and build trade reporting rules or industry practices;
  • Increases interoperability between firms’ reporting processes;
  • Reduces reconciliation breaks in dual-sided reporting regimes;
  • Revisions to regulations can be delivered through centralized DRR reporting code changes:
    • Only incremental effort is needed to extend the DRR model to other jurisdictions, or to reflect rule changes
    • New rules may be able to be implemented in a shorter timeframe with less effort and cost
  • Reduces the need for firms to dedicate significant resources and budget to change their systems for each new or amended reporting rule, allowing more time to be spent on implementation. Time, cost and resources needed by industry participants to build new or amended reporting rules from scratch is therefore reduced;
  • Improves the quality of reported data, resulting in cleaner data for regulatory aggregation, use and analysis in order to effectively evaluate systemic risk;
  • Will ultimately enable regulators to publish reporting rules as executable code that can be automatically read and interpreted by the technology systems of reporting entities.

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5. How are Trade Reporting Rules developed for DRR?

This short video provides a broad overview of how regulations are modeled for DRR.

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6. DRR has been successfully implemented for the CFTC Rewrite

DRR has been live since the implementation of the CFTC Rewrite on December 5, 2023.

 

The EMIR Refit is currently being developed in the DRR using the CDM.  Institutions involved with the development include but are not limited to:

For target timelines of completion, as well as DRR development for additional trade reporting jurisdictions, please see “Target DRR Development Timelines” below.

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7. ASIC and MAS Digital Regulatory Reporting (DRR): ISDA Webinar

Digital Regulatory Reporting (DRR) is an industry-mutualized initiative to increase the efficiency and reduce the cost of trade reporting rule implementation.  Based on a common industry interpretation of regulatory requirements, DRR will improve the consistency and quality of reported data.  The DRR already supports the amended CFTC swap data reporting rules, and with DRR for EU-EMIR and JFSA now going through industry UAT, DRR development is turning focus to ASIC, MAS and UK-EMIR reporting rule rewrites.

On 25 January 2024, ISDA hosted a brief, 30min webinar to overview the DRR development roadmap for the ASIC and MAS rule rewrites:

  • What: The approach for developing the new ASIC and MAS reporting rules within DRR as unambiguous, freely available, machine executable logic.
  • When: The timeline for developing the DRR code and when it will be ready for the industry to use.
  • How: The options available to firms for utilising DRR to improve reporting accuracy across jurisdictions – either to supplement and enhance existing reporting processes or to generate the outgoing messages themselves.

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8. Demo of DRR

This video provides a step-by-step demo for locating and referencing reporting rules, validating data, and running reports on the DRR platform. Although CFTC fields are used as examples in the demonstration, the functionality would be the same for any trade reporting jurisdiction which has been modelled using the DRR. The DRR’s test-driven approach is further illustrated by an example of how to automatically validate the result of changes to reporting rules, and how these are applied to amend the expected outcome in regulatory reports.

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9. Target DRR Development Timelines

The DRR will be modelled for multiple trade reporting rules, including the EMIR Refit, FCA, JFSA, ASIC, Monetary Authority of Singapore (MAS), and HKMA.

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10. Community-driven DRR Governance

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11. Fact Sheets and Press Releases

To obtain further information about DRR using the CDM or to participate in DRR development, please contact CDMDRR@isda.org.

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