In this episode, Andrew Dyson, Adrian Dale, and David Shone joins us from ISLA to discuss their sector’s implementation of a clause library and common domain model.
By reducing legacy process and technology friction, these new tools reduce cost and enable business innovation at speeds unfathomable today. They also have huge supervisory benefits as SFTR and CSDR data quality will soon be assessable via Common Domain Model (CDM) standards, developed collaboratively by the sector.
Assets are passing through the security lending market and they could have come from anywhere with different legal agreements and different standards that apply to them. CDM enables the sector to link all the business processes and data together to form a complete view of the market. The vision is that at some point, the sector will experience the equivalent of the Cambrian explosion, and all of a sudden, the data will just fit together correctly and flow seamlessly.
This is big change here and now that consultants have only previously dreamt of, and regulation is one of the driving forces. At long last, business process reengineering does not stop at the company confines – it can roll out across hundreds of market participants.
We discuss the implications of this change, the opportunities, threats and what’s in store for the regulator, regulated and their technology suppliers. We conclude that this digitalization will force new levels of collaboration between counterparties and open the market to new competitive forces.
Importantly, we note that the governance of the sector will need to be expanded to include these new standards which could form the basis for information sharing between regulator and regulated. Ominously, it is noted that using the CDM will not only increase the speed and accuracy of the data, it will increase the speed of new regulation from decades to weeks. You heard that here first…
Key topics
- JWG ISLA panel: realising the benefits of Digitalisation overview
- ISLA panel recording
- ISLA paper: Advancing the digital debate
- RegCast 4: Transforming data collection
- RegCast 3: Digital roars and new regulatory frameworks
- Digital Regulatory Reporting – tipping point 20201
- JWG Global Derivatives DRR programme
