Securities Lending MVP Merged into the CDM

LONDON, Thursday 1 July 2021 – The International Securities Lending Association (ISLA), a leading industry trade association representing the common interests of securities lending and financing market participants across EMEA, is delighted to announce the completion of the second phase of the association-led development of the Common Domain Model (CDM) for securities lending products.

In conjunction with our partners REGnosys, our members, and in close collaboration with ISDA and ICMA, a minimum viable product (MVP) for securities lending has been contributed into the CDM.

In less than one year since ISLA began development work on the CDM for securities lending, there is now a publicly available model in which a securities loan can be:

  • Defined transactionally;
  • Associated with a collateral schedule (cash or non-cash);
  • Executed, allocated and settled;
  • Re-allocated pre or post-settlement;
  • Returned (in part or in full);
  • Billed for, including the above events.

In addition, ISLA’s CDM Working Group, comprising some 35 member firms, has made major contributions and enhancements to the extensive foundations laid by ISDA, including enhancements to the allocation function, the ability to associate more than one legal agreement with a transaction, updates to the transfer function critical for physical settlement, and the very first concept of a bill within the CDM.

ISLA’s 2020 pilot development work, contributed to the core CDM earlier this year, in turn provided an accelerated foundation for ICMA to begin their repo contributions in earnest. Fruits of that work are expected to be seen in the coming weeks. In comparison to that pilot work, this contribution of an MVP securities loan is 3 times the size, adding over 1000 lines of code, and impacting 11 functional model components.

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. This sets the stage ready for further work in the industry, outlined in our recent paper, The Future of the Securities Lending Market | Advancing the Digital Debate, including opportunities such as integrating the ISLA Clause Library (Legal Clause Library & Legal Data Standards).

What our Members & Partners think…

“This has been an extremely productive partnership, not just between ISLA and REGnosys but also 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, comfort zones and working methods, has been truly remarkable. The result of this collaboration will benefit all market participants, not just in the Securities Lending market but across capital markets, thanks to the contribution back into the core CDM.” Leo Labeis, CEO, REGnosys.

“Financial institutions are increasingly keen to automate post-trade processes in order to cut costs and improve efficiency, but this requires greater standardization across the industry. This latest expansion of the CDM is another important step on the path to achieving a single set of digital standards across derivatives and securities financing transaction markets.” Ian Sloyan, Director – Data and Digital Solutions, ISDA.

“This is an important project for the industry, with three trade associations looking at securities lending, bonds and repos and derivatives. It has the potential not only to facilitate interoperability and cross industry efficiencies but to create the foundation for innovation in years to come.” Martin Scheck, CEO, ICMA.

“Congratulations to all of those involved in the International Securities Lending Association’s development of the Common Domain Model (CDM). This is a significant milestone that advances a truly cross-product model for Securities Lending, Repo and Derivative transactions. Eurex, as a leading market infrastructure provider, is fully supportive of the CDM initiatives undertaken by ISLA, ICMA and ISDA that will benefit the whole financial services industry.” Jonathan Lombardo, Senior Vice President, Head of Unit, Northern European Sales, Fixed Income Derivatives, Funding & Financing, Eurex.

“With the modelling done this year for an MVP of a Securities Lending lifecycle being committed to the core CDM, we are reaching a major milestone on the path to digitalising the post-trade market. The success of the project is testament to the tenacity and dedication of the ISLA leadership, the broad range of enthusiastic members of the CDM working group, and the clear vision that we all have of reducing integration complexities, improving interoperability between products, and using digital innovation to resolve legacy problems.” Chris Rayner, Software Engineer Specialist, FIS.

“Digitization of financial markets depends on efforts such as the CDM and in less than a year, the ISLA CDM initiative has laid important foundations on which innovation can build. We welcome the extensive collaboration across industry participants, and between ISLA, ISDA and ICMA members in advancing our shared digital agenda.” Mathew McDermott, Global Head of Digital Assets, Goldman Sachs.

“Pirum are proud to be involved in the CDM project and have been involved since the project started. Data transformation and process automation is at the heart of what we do as a fintech provider. Whilst Pirum has its own standardised data models and widely utilised automation services, we see the broader benefits of increased standardisation across the industry and therefore committed resources to assist ISLA on this project. As part of our FutureTech initiative, collaborating with the industry to increase efficiencies, reduce risk, and improve returns is one of our key objectives.” Alex Rothwell, Chief Technology Officer, Pirum.

“It’s been incredible to have a front-row seat as the future of our industry takes shape. With the CDM MVP, David and the ISLA team have laid the cornerstone. Now’s our opportunity to use that foundation, build on it and deliver the standardised, transparent, democratised securities lending solutions that our clients deserve.” Benjamin Smith, Product Manager, Sharegain.

For further information on the CDM, use cases and how to access the model, please refer to the following links and materials:

Access to the ‘Publicly Available’ Model

CDM Introduction

Showcase Videos

Rosetta Training Video


About ISLA
The International Securities Lending Association (ISLA) is a leading industry association, representing the common interests of securities lending and financing market participants globally. Its diverse membership of over 155 members includes institutional investors, asset managers, custodial banks, prime brokers and service providers.

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