Overview of the ISDA CDM

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What is the ISDA CDM

The ISDA Common Domain Model (CDM) is a standardised, machine-readable and machine-executable blueprint for how financial products are traded and managed across the transaction lifecycle. The product scope of the CDM includes OTC derivatives, cash securities, securities financing, and commodities.

A single, digital processing standard for trade events and actions enhances financial markets’ operational efficiency in several ways:

  • Enables inter-operability and straight-through processing across firms, solutions and platforms, reducing the need for reconciliation caused by variations in how each firm records trade lifecycle events.
  • Accelerates financial technology innovation by providing a common, readily operational foundation for how technologies like distributed ledger, smart contracts, cloud computing, and artificial intelligence can be applied to financial markets.
  • Delivers better regulatory oversight, promotes transparency and alignment between regulators and market participants and enables consistency in regulatory reporting, by providing a standard representation of trade data and supporting machine executable reporting requirements.

Further detailed information about the CDM and its application is available in the following resources:

The CDM Components

There are three sets of CDM components, as laid-out in the ISDA CDM components diagram below:

  • The Rosetta DSL
  • The ISDA CDM Distribution
  • CDM Application
../_images/cdm-components-diagram.png

The Rosetta DSL

The Rosetta DSL is the infrastructure component of the CDM. The CDM is a domain model written in a Domain-Specific Language (DSL) called Rosetta, comprising a syntax (or grammar) and code generators.

To enable adoption and implementation of the CDM by the community of industry participants, the Rosetta DSL and its default code generator (Java) are open source under an Apache 2.0 licence. Further code generators are also open source under an Apache 2.0 license, allowing industry participants to write and share code generators for any other language.

The Rosetta DSL documentation explains the Rosetta DSL, describes the mechanism to write and use code generators, and details all the modelling components available in the Rosetta syntax and their purpose, with examples drawn from the CDM.

The ISDA CDM Distribution

  • The ISDA CDM distribution is openly accessible to all industry participants and can be downloaded from the CDM Portal. The ISDA CDM is distributed subject to the ISDA CDM open source licence.
  • Information on how to access the CDM Java distribution can be found here: CDM Java Distribution Guidelines

Components

The ISDA CDM distribution comprises three main sets of components:

  • Model definition, which corresponds to the model as expressed in the Rosetta DSL syntax and contained into a set of .rosetta files. The primary dimensions of the model are listed below and further described in the Common Domain Model Section of the documentation.
    • Product
    • Event
    • Legal Agreement
    • Process
    • Reference Data
    • Mapping (Synonym)
  • Executable code distribution, automatically generated from the model definitions using available code generators from the Rosetta DSL. Once a code generator is implemented for a particular language, the corresponding code generation is included as part of the CDM build and release process, allowing the CDM to be automatically distributed in that language going forward.
  • Default implementation, comprising manually-written code (in Java) which, combined with the auto-generated code, provides a complete implementation of the model. This hand-written code is distributed together with the CDM to facilitate adoption by firms, which can directly use the CDM distribution to set-up and test an implementation. The default implementation can be used in its original state or be disabled or extended by industry participants in their implementation. For example, the default implementation uses the de-facto Java hash function for the key meta-data that supports the CDM cross-referencing mechanism. Firms may elect to use an alternative implementation.

Note

While the Java executable code distribution is complete, i.e. it represents the entire CDM as defined in Rosetta (plus any associated default implementation), some other distributions may only capture parts of the model: for instance, the Scala and TypeScript distributions include the complete data model and the function specifications, but not the executable code for functions.

Versioning

The CDM is developed, built and released using standard software source-control management. Each new released version is announced to users via a release note that describes the change introduced by that new version. The CDM release history is available in the Release Section of the CDM documentation.

The CDM is released using the semantic versioning system. The format of a version number is MAJOR.MINOR.PATCH (e.g. 1.23.456), where the:

  • MAJOR (1) version change introduces backward incompatible changes and will be used as high level release name (e.g. ISDA CDM Version 1)
  • MINOR (23) version change may or may not introduce backward incompatible changes, for example supporting a new type of event or feature or upgrading to a new version of the Rosetta DSL.
  • PATCH (456) version when a backward compatible change is made, for example adding a new class, attribute or updating documentation. An implementor would not have to make any changes to update to this release.

The MAJOR.MINOR.PATCH numbers may increment by more than one unit because release candidates may be created, but not immediately released. Consequently, a subsequent build referenced with the next incremental unit may be released with amendments that include the earlier release candidate.

CDM Application

An eco-system of CDM-based application components from service providers exists in order to support the adoption of CDM and the implementation of CDM-based production systems by industry participants. These applications may be open source software or licensed under commercial terms.

As an early participant in the development of the CDM, REGnosys have developed an offering to assist other market participants in implementing or contributing to the CDM, in particular:

  • The CDM Portal provides a user interface allowing users to navigate through and download the CDM.
  • Rosetta Core is a Software Development Kit (SDK or dev-kit) for the CDM, corresponding to an editable version of the CDM Portal. Rosetta Core consists of an integrated set of tools for adopting, editing and implementing the model, allowing the industry community to directly contribute code to the CDM.

ISDA encourages the adoption of CDM by service providers but does not endorse any of these application components.

The CDM Governance

The CDM governance framework regulates the development of the open source CDM standard via a three-tiered committee structure:

  1. The CDM Executive Committee is accountable for setting the strategy, promoting adoption of the standard, and overseeing the activity of the Working Groups and the Architecture & Review Committee. Members are senior executives appointed by the ISDA Board considering their strategic influence in the decision making at their firm and active contribution to the development of the CDM.
  2. The CDM Architecture and Review Committee is responsible for specifying the technical and modelling guidelines and reviewing and approving proposals for new modelling components introduced by the CDM Working Groups. Members include subject matter experts, senior technologists, as well as practitioners in business process, legal documentation, and technical modelling.
  3. The CDM Working Groups are assembled per subject matter or use cases to actively develop and implement concretely targeted elements of the CDM. Participants include ISDA members and non-members from the CDM user community who commit time and effort for the development and implementation of the CDM as a global standard.

Committee members or any user of CDM within the community can propose amendments to the CDM. The proposals can be defined at a conceptual level or a logical level (i.e. in code). In each case, the proposal must be developed in line with the CDM design principles and submitted to ISDA staff and the Architecture & Review Committee for approval. If approved, the amendment will be merged with the CDM master code branch. In some instances, the proposal may not be immediately approved, but may be assigned to an existing or new Working Group for the purpose of reviewing, revising or extending the proposal.