Industry Adoption Scenarios for Authoritative Data Stores using the ISDA Common Domain Model

TL;DR

This paper examines how the adoption of the ISDA Common Domain Model can standardize data and processes in the post-trade industry, exploring centralized and decentralized authoritative data store scenarios to improve efficiency.

Contribution

It introduces various industry adoption scenarios for authoritative data stores using the ISDA CDM, highlighting potential models and their implications for financial market infrastructures.

Findings

Multiple adoption scenarios identified for authoritative data stores.

Analysis of centralized versus decentralized models.

Potential for increased efficiency and reduced costs.

Abstract

In this paper we explore opportunities for the post-trade industry to standardize and simplify in order to significantly increase efficiency and reduce costs. We start by summarizing relevant industry problems (inconsistent processes, inconsistent data and duplicated data) and then present the corresponding potential industry solutions (process standardization, data standardization and authoritative data stores). This includes transitioning to the International Swaps and Derivatives Association Common Domain Model (CDM) as a standard set of digital representations for the business events and processes throughout the life cycle of a trade. We then explore how financial market infrastructures could operate authoritative data stores that make CDM business events available to broker-dealers, considering both traditional centralized models and potential decentralized models. For both types of model, there are many possible adoption scenarios (depending on each broker-dealer's degree of integration with the authoritative data store and usage of the CDM), and we identify some of the key scenarios.