The International Swaps and Derivatives Association (ISDA) and UK-based Tokenovate have launched a joint taskforce under the Fintech Open Source Foundation (FINOS). The goal is to turn ISDA’s Common Domain Model (CDM) into a practical, open-source library of standardised workflows and functions that can be used in live post-trade operations, explains Tokenovate in a press release.
The initial task will be to automate interest rate resets defined under the 2021 ISDA Interest Rate Derivatives Definitions, a process that supports trillions of dollars of contracts but remains largely manual and fragmented across firms. The switch from interbank offered rates to risk-free reference rates has made this work more pressing, as these new benchmarks require daily rate observations and compounding calculations that are both time-sensitive and error-prone.
The taskforce builds on ISDA’s earlier Smart Derivatives Contracts work, which explored how legal and operational standards could be represented in code. The CDM already provides a standardised data and event structure for derivatives, the new step aims to extend it with executable logic that can drive automation directly.
Open-source model
By embedding this logic into the CDM, ISDA and Tokenovate hope to eliminate interpretation differences and reconciliation issues between firms. The open-source model is designed to work across technologies, potentially connecting with tokenisation initiatives and AI-driven post-trade tools.
