The International Swaps and Derivatives Association (ISDA) announced that VERMEG, a technology provider for the banking and insurance sector, has integrated the Common Domain Model (CDM) into its COLLINE collateral management system to support the consumption of digitized regulatory initial margin (IM) credit support annexes (CSAs).
Implementing the CDM – a free-to-use data standard for financial products, trades and lifecycle events – will reduce operational risk and the potential for errors and disputes and dramatically speed up onboarding times for customers. For example, key data from a regulatory IM CSA negotiated on the ISDA Create online negotiation platform can be digitized using the CDM and flow seamlessly through to the COLLINE system as part of a contract lifecycle management strategy, cutting the resources and costs associated with manual processing.
VERMEG is the first entity to integrate the CDM to improve the efficiency of collateral processes, with several other firms currently in testing. As well as digitizing key elements of regulatory IM and variation margin CSAs, ISDA has developed use cases that apply the CDM to collateral representation, margin and settlement processes, margin call issuance and response messages, and cash collateral interest processing. These use cases have the common goal of reducing operational, liquidity and counterparty risks.
“We are delighted that VERMEG has put the CDM to work within its COLLINE collateral management system, which will expedite collateral management onboarding and decrease related operational risks. We are working with multiple technology providers and end users to bring greater efficiency to key collateral processes,” said Scott O’Malia, chief executive of ISDA, in a statement.
“We are proud to be among the early adopters of the CDM standards in collateral management. The new features efficiently streamline agreement onboarding in COLLINE, significantly reducing costs for both existing clients and new customers,” said Wassel Dammak, Collateral Solutions Strategy at VERMEG, in a statement.