The International Swaps and Derivatives Association (ISDA) and fintech Tokenovate announced the establishment of a new taskforce within the Fintech Open Source Foundation (FINOS) to build a smart contract model within the Common Domain Model (CDM) to translate ISDA’s legal and operational standards into executable form.
The initiative responds to growing market demand for standardized, interoperable post-trade processing and will deliver an open-source, production-ready library of CDM functions and workflows, freely available to market participants.
The taskforce’s initial focus will be the automation of interest rate resets, referencing the 2021 ISDA Interest Rate Derivatives Definitions. This process underpins trillions of dollars of financial contracts globally but remains largely manual and inconsistent across firms. The shift to risk-free reference rates has made this challenge more acute. These benchmarks, introduced to replace legacy interbank offered rates, require daily rate observations, business-day adjustments and compounding calculations that demand precision and consistency. Automating this process through the CDM represents a major step toward real-time, programmable post-trade infrastructure.
The CDM already provides a canonical representation of the contract layer, defining standardized product terms, calculation conventions and event structures. The smart contract model extends this framework by introducing the executable logic that will power the automation of derivatives products, in line with ISDA’s foundational legal and operational standards.
Designed to be technology-agnostic, the initiative delivers immediate operational and strategic benefits by eliminating interpretative differences and reconciliation breaks, enabling deterministic, auditable execution and promoting interoperability with digital infrastructure, tokenization and artificial-intelligence-driven solutions.
“ISDA is committed to promoting greater standardization and efficiency in derivatives markets. By embedding the CDM into executable smart contract logic, we are taking a significant step toward fully digitized, interoperable post-trade processes. Our collaboration with Tokenovate and the FINOS community will help ensure that ISDA’s legal and operational standards are not just documented, but operationalized — enabling real-time automation and reducing friction across global derivatives markets,” said Olivier Miart, co-head of Digital Transformation at ISDA, in a statement.
“For more than 40 years, ISDA has set the standards that underpin the global derivatives market. During my time at ISDA, I was fortunate to contribute to that journey, from early work on smart derivatives contracts to the development of the CDM. This collaboration marks the next stage in that evolution: moving from conceptual design to reality. Embedding ISDA’s legal and operational standards directly into code establishes a common foundation for automation, interoperability and innovation across the market. Tokenovate is proud to work with ISDA to help bring that vision to life,” said Ciarán McGonagle, chief legal and product officer at Tokenovate, in a statement.