The International Securities Lending Association (ISLA) has announced the integration of its Clause Library and Taxonomy with the Common Domain Model (CDM).
The integration is the first complete contribution to the CDM in respect of a master agreement.
The CDM, an open-source project hosted by FINOS, aims to unify a series of actions, lifecycle events and product definitions by developing a single openly available language or code.
ISLA reports that its addition of a master agreement structure to the CDM has enabled the model to represent terms negotiated in a standardised form.
The Clause Library and Taxonomy launched in 2021 in partnership with D2 Legal Technology (D2LT), with the aim of facilitating more efficient negotiation of the 2000, 2010, and 2018 Security Interest over Collateral versions of the Global Master Securities Lending Agreement (GMSLA).
The association says integration of the Clause Library and Taxonomy with the CDM will facilitate improved management of executed contracts and future contracts between industry participants by providing an industry data dictionary for GMSLA contracts.
ISLA says the integration allows for the use of data extraction tools with artificial intelligence (AI) and natural language processing (NLP) capabilities.
Andrew Dyson, CEO of ISLA, says: “The pursuit of digitalisation in all its forms, including the wider adoption of DLT and tokenisation, can only realistically realise its full potential if products are built on solid and sustainable foundations.
“Bringing key elements of the Clause Library into the CDM is part of the process that will allow market participants to increasingly develop solutions and novel products that are underpinned by these standards, thereby driving better interoperability and efficiencies across our markets.”
Akbar Datoo, CEO of D2LT, says: “It is very exciting to see this next step in the GMSLA’s digitalisation journey. It will address the issues of legal agreement data quality and governance, and will no doubt ensure resource optimisation, regulatory compliance and operational management for the industry over the coming months.”
D2LT also partnered with the International Capital Markets Association to launch its Clause Library and Taxonomy in August 2023.
