ISLA on track with development of its securities lending common domain model
01 July 2021 UK
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The International Securities Lending Association has announced the completion of the latest phase of its Common Domain Model (CDM) project for securities lending transactions.
Working in concert with its members and with its technology partner REGnosys, ISLA has established a ‘minimum viable product’ for securities lending trades and has contributed this into the CDM.
The CDM provides a common data representation of transaction events, offering a common template or set of fields that the industry will use to share trade information and other key data.
This should reduce the burden of reconciliation and lower the risk of mismatches or settlement failure caused by inconsistency in how data fields are used.
For close to three years, the International Swaps and Derivatives Association (ISDA) has been active in the OTC derivatives market in promoting a common digital representation of the steps, or ‘lifecycle events’, associated with a derivatives transaction.
Subsequently, ISLA has been working with ISDA and the International Capital Markets Association (ICMA) to apply a CDM to securities lending.
With this objective, it completed a pilot with REGnosys, its technology vendor for the CDM project, in November 2020.
The Association says that in less than 12 months since it began development work on this project, this now offers a model, in the public domain, which enables trade definition, linking to a collateral schedule, managing execution, allocation and settlement, as well as returns, re-allocations and billing requirements.
It notes the ISLA CDM Working Group has built on the foundations laid down by the ISDA CDM, adding enhancements to the allocation function, the ability to link more than one legal agreement to a trade, and other benefits.
“In summary, the ISLA MVP Phase completion represents a significant contribution to financial markets’ digital standards only made possible by the efforts, collaboration and support of our membership,” says ISLA.
REGnosys CEO Leo Labeis says: “This has been an extremely productive partnership not just between ISLA and REGnosys, but with all of ISLA’s membership and with the other trade associations involved. The speed at which ISLA and its members have not only embraced change, but actively contributed to advancing it by working outside traditional boundaries and working methods, has been remarkable.”
Working in concert with its members and with its technology partner REGnosys, ISLA has established a ‘minimum viable product’ for securities lending trades and has contributed this into the CDM.
The CDM provides a common data representation of transaction events, offering a common template or set of fields that the industry will use to share trade information and other key data.
This should reduce the burden of reconciliation and lower the risk of mismatches or settlement failure caused by inconsistency in how data fields are used.
For close to three years, the International Swaps and Derivatives Association (ISDA) has been active in the OTC derivatives market in promoting a common digital representation of the steps, or ‘lifecycle events’, associated with a derivatives transaction.
Subsequently, ISLA has been working with ISDA and the International Capital Markets Association (ICMA) to apply a CDM to securities lending.
With this objective, it completed a pilot with REGnosys, its technology vendor for the CDM project, in November 2020.
The Association says that in less than 12 months since it began development work on this project, this now offers a model, in the public domain, which enables trade definition, linking to a collateral schedule, managing execution, allocation and settlement, as well as returns, re-allocations and billing requirements.
It notes the ISLA CDM Working Group has built on the foundations laid down by the ISDA CDM, adding enhancements to the allocation function, the ability to link more than one legal agreement to a trade, and other benefits.
“In summary, the ISLA MVP Phase completion represents a significant contribution to financial markets’ digital standards only made possible by the efforts, collaboration and support of our membership,” says ISLA.
REGnosys CEO Leo Labeis says: “This has been an extremely productive partnership not just between ISLA and REGnosys, but with all of ISLA’s membership and with the other trade associations involved. The speed at which ISLA and its members have not only embraced change, but actively contributed to advancing it by working outside traditional boundaries and working methods, has been remarkable.”
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