The financial industry got a significant upgrade in data standardization with the release of CDM 6.0, the latest production version of the Common Domain Model. This release, the second major update since the model found its home at FINOS, represents a collaborative effort with ISDA, ISLA, and ICMA and brings over 100 functional and technical enhancements. If you're involved in financial data management and building systems for post-trade services, this is a release you need to know about.
Major components of this release include:
- Asset Refactoring: This is a major overhaul of how financial products are represented in the CDM, bringing greater consistency and clarity across a wider range of asset classes. This refactoring is crucial for supporting complex securities financing transactions and enabling future expansion of the model.
- Option Payout Refactoring: Simplifies the definition of option contracts, making them easier to understand and manage.
- Standardized IM Schedule: Introduces a standardized approach to calculating initial margin.
... as well as several additional model changes, bug fixes and synonym mappings since the last production release (CDM 5.20).
CDM 6.0 builds on the foundation laid by previous versions, incorporating developments made throughout 2024 and previously available in the CDM 6-dev release. It tackles some key challenges and expands the model's reach into a wider range of asset classes. Here are some of the highlights:
Asset Refactoring: The Star of the Show
One of the most significant advancements in CDM 6.0 is the refactored product model, centered around the concept of "Asset." This isn't just a minor tweak; resulting from a dedicated CDM task force focused on extending the model to encompass more asset classes, addressing long-standing challenges, and bolstering support for securities financing transactions. This refactoring promises to bring greater consistency and clarity to how financial products are represented. For those interested in the details, the task force's objectives and design artifacts are documented in GitHub Issue 2805.
Standardized IM Schedule: Simplifying Initial Margin Calculation
CDM 6.0 introduces a standardized approach to calculating initial margin. This provides a practical and straightforward alternative for market participants who may lack the resources for complex quantitative models or prefer not to rely on third-party services. This standardization should contribute to greater efficiency and transparency in margin calculations.
Option Payout Refactoring: Streamlining Option Contract Definitions
Another key improvement is the refactoring of option payouts. The introduction of unified "Exercise Terms" simplifies the definition of various option contract types, making them easier to understand and manage.
Beyond the Model: Enhanced Tools and Documentation
The improvements in CDM 6.0 extend beyond the model itself. This release also includes significant enhancements to supporting resources:
- CDM Documentation: The documentation has been thoroughly updated to reflect the enhanced design of products and business events in CDM 6.0. This is your go-to resource for understanding the changes.
- CDM Sample Files: Updated sample files showcase the new modeling designs, providing practical examples for implementation.
- CDM Object Builder: This tool, which allows users to construct CDM objects and generate JSON serialized data, has also been updated to align with the new release.
Get the Details and Start Exploring
Want to learn more? The Release Note for CDM 6.0 provides a comprehensive overview of all the changes. You can download the CDM release itself from GitHub and start exploring the new features and capabilities. This release represents a significant step forward in financial data standardization, and its adoption across the industry promises to bring greater efficiency, interoperability, and transparency.
Ready to take your CDM knowledge to the next level? Explore CDM on GitHub and deepen your knowledge with FINOS and Linux Foundation Education’s free training. Get involved and help shape CDM's future by joining the mailing list and working groups.
Author: Lionel Smith-Gordon, Head of Client Services | REGnosys
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