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ISDA, ICMA And ISLA Sign MoU On The Common Domain Model
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Global Financial Bodies Unveil Transition to Single Common Domain Model
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ISLA adds sec lending code to model which digitally represents the trade lifecycle
Contribution to the code will the addition of securities loan product and transaction definitions, as well as a settlement and allocation event for a cash settled DVP loan.
May 13, 2021 2:02 PM GMT
The International Securities Lending Association (ISLA) has contributed code to the open source core domain model (CDM), which its chief executive says will set the backdrop for the future state of the markets.
The announcement follows through on an agreement signed between ISLA and the International Swaps and Derivatives Association in July 2020.
A CDM encodes a transaction and the subsequent events that can occur explicitly and unambiguously, so that common inputs lead to common outputs throughout the lifecycle of a transaction. The initiative is aimed at enhancing consistency and facilitating interoperability across firms and platforms.
Securities finance: Securities lending industry defines its digital future
In a white paper 18 months ago, the International Securities Lending Association (Isla) and law firm Linklaters proposed that the securities lending market is at a crossroads. The market is becoming ever-more complex and regulation more onerous. Processes and systems that previously served the market relatively well are now becoming more cost and time-intensive.
The white paper – called ‘The Future of the Securities Lending Market: An Agenda for Change’ – predicted costs and risk will continue to increase, potentially to unsustainable levels. This means that standardising, automating and streamlining processes is more important than ever.
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