Common Domain Model (CDM)

What is a CDM?

A domain model is the combination of data representation and functional representation of processes which can act on that data. Every firm will have their own domain model today, though it may not be referred to as that; actually, most firms will have multiple domain models governing the life cycle of any single trade.

A CDM is an agreed upon, standardised domain model i.e. a standard digital representation of data and function. Importantly, the CDM is agreed upon based on real-world business outcomes, and is focused on standardising processing, not just the underlying data.

A full-CDM will integrate all aspects of a transaction including: product representation; event representation and outcome, from regular events such as billing and margining, to less frequent complex corporate actions; legal documentation impacting a transaction, such as a GMSLA or a collateral agreement; process sequencing and outcome; reference data and translation into or from other data models such as FpML.

What Does a CDM Enable?

In the short term, a CDM allows for unambiguous and consistent messaging, storage and processing of data. This simplifies many operational processes and reduces the need for reconciliations between systems or parties using the CDM.

In the longer term, having already encoded functionality, the CDM can enable the easier construction of smart contracts, faster connection to and support of a distributed ledger, and ultimately the ability for firms to innovate and compete on products, not on infrastructure or data storage.

Benefits of a CDM

Through the CDM members should see a substantial reduction, if not a total eradication, of:

  • Reconciliation breaks internally & externally
  • Valuation differences
  • Collateral disputes
  • Reporting mismatches
  • Operational inefficiency
  • Operational risk

The extent to which these benefits at any given point in time are realised is dependent on how fully the CDM has been integrated at that time. For example, to reduce collateral disputes with a counterparty, both parties must be using the CDM, or to reduce internal inter-system breaks, those systems must be using the CDM.

Data & Function


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