The Field Effect releases Common Domain Model guidance
02 November 2018 London
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The Field Effect has released a common domain model (CDM) document, which explains and clarifies what a CDM may be, as well as its possible uses to the securities finance sector.
This follows the recent initiative from the International Swaps and Derivatives Association (ISDA) to develop and codify a CDM.
Impact analysis conducted by The Field Effect indicated that a CDM model could have a wide-reaching business benefit across many business functions within securities finance.
In the document, The Field Effect has recommended that any new CDW model utilising industry best practices across securities borrowing and lending, repo and prime brokerage (margin lending) would be designed utilising the ISDA CDM framework.
For the initial stages, The Field Effect has advised that an analysis of the current industry participant process, systems, and data models be carried out across the in-scope asset classes.
Once complete, a SecFin CDM model will align with the derivatives model and will allow improved efficiencies for banks, The Field Effect revealed.
Meanwhile, the outcome is expected to be a best-fit minimal delta between current industry participant processes, systems, and data and the new CDM model.
Julian Eyre, business development at The Field Effect, commented: “Many bank process and systems are approaching legacy status. The never ending wave of regulation has increased bank costs significantly since 2010.”
“A tactical approach to solving the business imperatives means there is often a challenge to design and drive a strategic agenda. At The Field Effect, we have been examining a range of industry initiatives and evaluating the opportunity to drive significant transformation on a cost-effective global basis.”
“After gaining insight into the ISDA CDM initiative we feel this is potentially a good model to review and assess suitability for use in adjacent sectors and leverage the benefits a CDM model could bring.”
Eyre added: “The CDM FAQ paper aims to drive a preliminary discussion and explanation of a CDM and trigger meaningful dialogue about the direction and strategic change, across banks in general and securities finance in particular.”
“The forthcoming Securities Finance Transactions Regulation will place demanding obligations on financial sector securities finance operations and we feel there may be an opportunity to create a strategic digital foundation and unlock the benefits of a CDM model.”
This follows the recent initiative from the International Swaps and Derivatives Association (ISDA) to develop and codify a CDM.
Impact analysis conducted by The Field Effect indicated that a CDM model could have a wide-reaching business benefit across many business functions within securities finance.
In the document, The Field Effect has recommended that any new CDW model utilising industry best practices across securities borrowing and lending, repo and prime brokerage (margin lending) would be designed utilising the ISDA CDM framework.
For the initial stages, The Field Effect has advised that an analysis of the current industry participant process, systems, and data models be carried out across the in-scope asset classes.
Once complete, a SecFin CDM model will align with the derivatives model and will allow improved efficiencies for banks, The Field Effect revealed.
Meanwhile, the outcome is expected to be a best-fit minimal delta between current industry participant processes, systems, and data and the new CDM model.
Julian Eyre, business development at The Field Effect, commented: “Many bank process and systems are approaching legacy status. The never ending wave of regulation has increased bank costs significantly since 2010.”
“A tactical approach to solving the business imperatives means there is often a challenge to design and drive a strategic agenda. At The Field Effect, we have been examining a range of industry initiatives and evaluating the opportunity to drive significant transformation on a cost-effective global basis.”
“After gaining insight into the ISDA CDM initiative we feel this is potentially a good model to review and assess suitability for use in adjacent sectors and leverage the benefits a CDM model could bring.”
Eyre added: “The CDM FAQ paper aims to drive a preliminary discussion and explanation of a CDM and trigger meaningful dialogue about the direction and strategic change, across banks in general and securities finance in particular.”
“The forthcoming Securities Finance Transactions Regulation will place demanding obligations on financial sector securities finance operations and we feel there may be an opportunity to create a strategic digital foundation and unlock the benefits of a CDM model.”
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