Recent studies have shown that incorrect trade booking is a primary source of settlement failure. Aligning the Common Domain Model (CDM) and FIX protocol to support common processing and functionality in the pre-trade cycle will enhance market efficiency, reduce costs, and facilitate compliance with downstream regulatory obligations such as accurate transaction reporting.
“The journey towards common and open standards is a key development for financial markets to address legacy challenges of interoperability, resilience, and the digitization of markets,” the International Securities Lending Association (ISLA) said in a statement.
The news comes after a roundtable meeting between ISLA and the FIX Trading Community on the formation of common standards for securities lending, with over 60 market participants from across the globe dialing in to discuss the objectives and roadmap.
Initially focusing on pre-trade processing and trade execution, the collaboration will look to reinforce the complementary nature of the CDM and FIX protocol and identify opportunities to align and leverage both standards to improve processing, workflow management, and interoperability across both standards.