ISDA & Tokenovate launch CDM taskforce for post-trade automation

ISDA and Tokenovate have jointly launched a new taskforce within the Fintech Open Source Foundation to work on advancing the operationalisation of the Common Domain Model for post-trade processing in financial markets.

Taskforce for automation

The new taskforce is aimed at addressing market demand for standardised and interoperable post-trade processing by delivering an open-source, production-ready library of Common Domain Model (CDM) functions and workflows. This resource will be made freely available to all market participants.

The initial focus of the taskforce is automating interest rate resets, a critical but still mainly manual operation supporting trillions of dollars of financial contracts globally. With the transition to risk-free reference rates, this challenge has grown. The new reference rates, which replace traditional interbank benchmarks, require daily observations, business-day adjustments and compounding calculations, making precision and consistency essential in these processes. Through the CDM, the taskforce aims to enable real-time and programmable infrastructure for post-trade activity.

Smart contract integration

Building upon the ISDA Smart Derivatives Contracts framework, the taskforce is constructing a smart contract model within the CDM. This model is intended to encode ISDA's legal and operational standards into executable code, enabling the transition from manual to automated workflows and supporting the full digitisation and interoperability of post-trade processes. The CDM already standardises product terms, calculation methods and event structures; the new smart contract enhancements will introduce the executable logic needed to power automation.

The approach is designed to be technology-agnostic. By implementing the automation within the CDM, the project seeks to eliminate interpretative differences and reconciliation inconsistencies, allow for auditable execution, and support integration with wider market infrastructure, such as digital and tokenised asset systems, and artificial intelligence-based solutions.

Olivier Miart, Co-head of Digital Transformation at ISDA, said:

"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."

The CDM is governed under the FINOS open-source framework and provides a single, consistent foundation for trade lifecycle automation, regulatory reporting and interoperability across both institutions and infrastructures.

Industry perspectives

Ciarán McGonagle, Chief Legal & Product Officer at Tokenovate, reflected on the development and ISDA's historical role in setting industry standards:

"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 & Product Officer at Tokenovate."

With the automation of interest rate resets, market participants are expected to benefit from reduced risk of operational errors and increased efficiency. The open-source nature of the CDM initiative enables consistent, transparent standards to be applied across the financial sector, lowering the cost and complexity of compliance and operational reconciliation.

The announcement emphasises the intention to enable broad industry use and adoption, making the new CDM libraries available to global markets as open-source resources and inviting stakeholders to register their interest in participating or contributing to future developments.