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What does Financial Products Markup Language (FpML) Mean?
Experts explain that Financial Product Markup Language
empowers system-to-system communication and business-to-business transactional
knowledge. Financial Product Markup Language helps make derivatives trading clearer, also helps track the information between different types of applications.
There’s the aim to encourage risk analysis and other aspects of derivatives
trading. This type of specific purpose-driven software is based on a greater
notion of eXtensible Markup Language, that items and objects may be completely
explained using this type of code to be able to set up complex models or operations.
accredited standard allows companies to always communicate about
forward rate agreements, interest rate swaps and other facets of trading.
More Info On Financial Products Markup Language (FpML)
Financial Products Markup Language (FpML) is a business information exchange standard based on Extensible Markup Language ( XML ) that enables business-to-business over-the-counter (OTC) financial derivative transactions using the web . FpML is utilized between participating companies for conveying OTC transaction information, inside a business with the intention of sharing OTC transaction info, and involving a company and also an external firm offering a service. FpML is licensed and, because it is independent of hardware or the software used by participating companies, ensures . FpML focuses on interest rate swaps and Forward Rate Agreements (FRA) but may eventually be utilized for all facets of OTC transactions.
FpML Home Page FpML Specifications FpML FAQ Document Announcement 2003-02-26: “ISDA Releases FpML Version 2.0 Recommendation” FpML Version 2.0. Recommendation 10-February-2003. PDF. [official origin . DOC] FpML v2.0 XML DTD. See also the official samples and version . Press release 1999-06-09: “J.P. Morgan, PricewaterhouseCoopers Propose FpML, a New E-commerce Standard – Financial Products Markup Language Handles FX and Fixed Income Derivatives.” [local archive copy] FpML Working Groups FpML Organizational structure FpML Discussion Group. Yahoo Group ‘fpml-discuss’ [November 12, 2003] “Take It to the Bank: Implementing FpML.” In Web Services Journal (November 12, 2003). “The International Swaps and Derivatives Association (ISDA) is the global trade association representing participants in the privately negotiated derivatives industry, a company covering swaps and options across all asset types. One of the most notable accomplishments has been the creation of a document architecture which has facilitated market development. ISDA is working to state that the document structure in softcopy form to allow raising volumes in the derivatives markets to be managed with reduced cost and increased accuracy, through use of automation. As part of the procedure, ISDA officially embraced FpML.org, the company which developed Fiscal products Mark-Up Language, a business information exchange standard for electronic dealing and processing of financial derivatives instruments. Based on XML, FpML establishes the industry protocol. FpML 4.0 supplies XML Schema objects to spell out the vast majority of derivative contracts by volume, derived directly from the legal framework created by ISDA, and is made publicly accessible by them under public license… ISDA does not provide ‘off-theshelf’ service in the public standard; it’s straightforward to create extensions that are private, for product description or workflow motives. These XML Schema objects are composed to make different distinct document prototypes, such as a Trade Confirmation. This document-centric approach enables us to form document cases that represent both the full economics of this deal (or optionally, a reference for this) along with also the workflow state the document instance is currently in. Web services offer an interface that is perfect to providers which function on document cases given the service supplied for data typing, structure, and platform neutrality. Support can be given at all stages of procedure flow…” [December 30, 2002] “Consistency Checking of Financial Derivatives Transactions.” From Daniel Dui (University College London, Department of Computer Science), Wolfgang Emmerich (Zuhlke Engineering Ltd), Christian Nentwich (University College London, Department of Computer Science), along with Bryan Thal (UBS Warburg). Paper presented at Net.Object Days 2002 (NODe 2002), October 7-10, 2002, Messekongresszentrum, Erfurt, Germany. 18 pages (with 23 references). Web-Services Track. “Financial institutions are increasingly using XML as a de-facto benchmark to represent and exchange information regarding their services and products. Their goal is to process transactions cost-effectively, and with minimum human intervention. Throughout the lifetime of a financial trade, inconsistencies appear due to the character of the industry and their resolution introduces cost and time overheads. We give a summary of requirements to inconsistency detection in our specific domain of interest: the more complex (OTC) financial derivatives industry. We propose a taxonomy for the classes of consistency constraints which discover trade inconsistencies name and present xlinkit, a technology for managing the consistency of distributed documents, may be utilized to define consistency limitations and exist in this domain. We present the result of an evaluation where xlinkit has been used to define the test rules for version 1.0 of the Financial Products Markup Language (FpML)… The success of this evaluation has directed to the FpML steering committee to look at a proposal to utilize xlinkit since the typical language to state validation limitations for FpML records. The degree of abstraction given by xlinkit makes it particularly suitable. Moreover, the constraint checker that is xlinkit will be used by FpML as the reference implementation for an FpML analysis engine against which the business could compare their proprietary implementations. We think that past derivative marketing, xlinkit has many potential application areas. Issues similar to the ones described in this paper happen whenever information is exchanged between associations. This is the case in e-commerce and digital company. By way of instance, we also have investigated the usage of xlinkit in procurement processes by RosettaNet. Gem Soup Launches Collaborative Software Development to OTC Derivatives.” – “Brian Lynn, a driving force behind the introduction of FpML.org and previously VP of eTrading Systems at JPMorgan Chase and Co., announced today the creation of Gem Soup LLC, the world’s first company devoted to collaborative development of software tools behind FpML communications between companies. By 1999 until this past month Mr. Lynn has been co-chair of and JPMorgan’s representative to FpML’s important Standards Committee… Gem Soup LLC may develop or acquire initial versions of its products, and will provide its members with a collaboration environment, product plan advice, an automated testing package, a rigorous release control procedure, and product documentation and service. Gem Soup members offer input on priorities will lead fixes and enhancements, and then integrate the tools in business strategies and their own strategies. Include a matching tool, a FpML API that is easy, an FpML viewer/editor, a commerce record, along with message validators and converters. A number of these can be dependent on straightforward product templates, which can make them simple to personalize for products that are new. Several will be accessible in low-cost models to encourage application development… Financial Products Markup Language is the official formula of ISDA (the International Swaps and Derivatives Association) for explaining privately negotiated financial derivative transactions… Gem Soup LLC is the world’s first collaborative creation community for FpML…” [November 05, 2002] “Web Services on Wall Street — Inside STP.” From Gunjan Santami. Case Study. “Straight-through Processing (STP), a solution that simplifies the eventual processing of transactions for many monetary instruments from initiation to resolution, is set to revolutionize the financial industry. STP will streamline activities, leading to reduced risks, decreased failures, and lower costs per trade. It encompasses a set of software, business processes, and standards that will redefine the processing and settlement paradigm over the capital markets industry… A SOA-based framework is effective at providing support for multiple XML standards, such as ISO 15022 [see ISO Working Group 10 – ISO WG 10] and also FpML, at exactly the exact same period, and adding additional standards support without substantial redevelopment effort… With the use of Web Services as an enabling technology, STP-related troubles and issues may shift from connectivity amongst different software in-house and with trading partner software to the material and structure of this information that is exchanged. The analogy here will be that the standard mechanism will be defined by Internet Services in addition to the addressing and envelope format for changing letters. What is inside the envelope (the content of this letter) will be described by the XML-based company process standard, such as ISO 15022 XML…” [July 20, 2002] FPML Validator from xlinkit. “You can use this form to validate an FpML 1.0 compliant document. Just input the URL of your document and click on the button… The xlinkit FpML Validator supports FpML 1.0 compliant documents against further integrity constraints. Any record that is valid against the FpML DTD by entering the document URL from the form can be submitted by you. The checks consist of 28 rules which check the validity of proper understanding between industry centers, dates and much more. Click here to get a comprehensive collection of rules given from the xlinkit rule language. Steven Lord along with also the FpML Interest Derivatives Products Working Group supplied in language the rules and formalised by Christian Nentwich along with Daniel Dui in the xlinkit XML rule language. Each rule can be understood from the original XML form or rendered to a more accessible HTML representation…” [June 26, 2002] “ISDA Issues Call For Engagement for FpML Messaging Working Group.” – “The International Swaps and Derivatives Association (ISDA) [on June 26, 2002] issued a call for participation to its messaging working group to its Financial products Markup Language (FpML) standard. ‘The timing is right to concentrate on the company processes,’ said Managing Director Michael Liberman, Goldman Sachs and Co-Chair of their FpML standards committee. The working class will expand the FpML standard to add messages encouraging business processes relating to trading, pricing, risk management and credit assessing… FpML is a business information exchange standard for electronic dealing and processing of financial derivatives instruments. It establishes the industry protocol for sharing information on, and dealing in, financial swaps, derivatives and structured products, on the web. It is based on XML (Extensible Markup Language), the standard meta-language for describing data shared between applications. Now focusing on FX, interest rate derivatives and equity derivatives, FpML will eventually cover all categories of privately negotiated derivatives. ISDA is the global trade association representing leading participants. ISDA was chartered in 1985, and today has more than 575 member institutions from 46 countries on six continents. These members include the majority of the world’s leading institutions that deal in privately negotiated derivatives, in addition to many of the businesses, governmental entities and other end users that rely on over derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association’s internet site.” [May 14, 2002] European Service Providers Create Securities Financing Extensible Markup Language (SFXL). Several service providers from the securities finance business have declared support for development of an XML-based Securities Financing Extensible Markup Language (SFXL), currently in draft from SecFinex. SFXL is being designed as an industry standard for “information move from the highly fragmented securities industry.” The ten businesses represent digital marketplace providers, risk management service providers, reconciliation service providers, and trade processing service providers. The initial draft specification governs the transport of information on securities fund transactions; planned enhancements “will encompass securities inventories as well as also the post-trade servicing of securities fund actions such as trade matching, charging, and marking to market.” The SFXL format is being designed as an “open standard, freely available to all service providers and participants in the securities funding stadium” and will be offered in its initial draft to Financial Products Markup Language (FpML) operating classes. The ten first company patrons of this Securities Financing Extensible Markup Language have agreed to integrate SFXL and FpML in their software programs. Securities funding is said to be a trillion-dollar industry, “with the magnitude of this market estimated at between $1.5 trillion and $2 trillion worldwide.” FpML is the XML-based, freely licensed, e-commerce standard supporting OTC trading of financial derivatives. The working class will work in close cooperation and will concentrate on credit default swaps as a merchandise. The job on credit derivatives will probably form a part of version 4.0 of the FpML standard. The target completion date to the model 4.0 operating draft is December 2002. The working class will begin. The charter of this credit derivatives operating class along with the entire range of the job for version 4.0 may be seen at www.fpml.org/wg/cd/index.asp… FpML is a business information exchange standard for electronic dealing and processing of financial derivatives instruments. It establishes the industry protocol for sharing information on, and dealing in, financial swaps, derivatives and structured products, on the web. It is based on XML (Extensible Markup Language), the standard meta-language for describing data shared between applications. All categories of privately negotiated derivatives will eventually be incorporated into the regular…” [May 06, 2002] “ISDA Issues Call for Engagement. FpML Working Group to Extend Equity Derivatives Coverage.” FpML is the XML-based, freely licensed, e-commerce standard supporting OTC trading of financial derivatives. After the inclusion of the simple equity derivatives in FpML Version 3.0, the working group plans to cover more exotic equity holdings. ‘There’s interest from the business for a great deal of momentum within the working class and equity derivative coverage,’ said Co-Chair of the FpML Standards Committee and Vice President e-Trading, Brian Lynn, Cross-Business e-Commerce group for JP Morgan Chase. The working group intends to immediately begin work on version 4.0 of their standard focusing on inclusion of option features such as Asians, Barriers, Indices, Bermudans, Binaries, Quantos, Composites, different types of deferred term choices and different options trading approaches. ‘We’re pleased with the continuing progress of FpML in the subject of equity derivatives as well as the success of this FpML working group in developing merchandise in coordination with all the ISDA documentation functioning class,’ said Robert G. Pickel, Executive Director and CEO of ISDA. ISDA’s documentation class on equity holdings is reviewing the Equity Definitions. The charter of this Equity Derivatives working class along with the entire range of this job for version 4.0 may be seen at http://www.fpml.org/wg/equity/index.asp. Parties interested in participating in this working class needs to complete the form available on the FpML site; the time commitment for this class is one-half per day weekly. It establishes the industry protocol for sharing information on, and dealing in, financial holdings over the Internet. It is based on XML (Extensible Markup Language), the standard meta-language for describing data shared between applications. All categories of over-the-counter (OTC) derivatives will eventually be incorporated into the standard… ISDA is the global trade association representing leading participants in the privately negotiated derivatives business. ISDA was chartered in 1985, and today has more than 560 member institutions from 44 nations on six continents. These members include the majority of the world’s leading institutions that deal in privately negotiated derivatives, in addition to many of the businesses, governmental entities and other end users that rely on over derivatives to manage efficiently the financial market risks inherent in their core economic activities.” [April 19, 2002] ISDA Releases FpML 3.0 Working Draft with Assistance for Interest Derivatives and Portfolios. FpML is an XML-based protocol “enabling e-commerce activities in the sphere of financial derivatives. The development of the normal, controlled by FpML, will ultimately enable the digital integration of a array of services, from electronic trading and confirmations to portfolio specification for risk evaluation. All sorts of over-the-counter (OTC) derivatives may, over time, be incorporated into the normal. FpML 3.0 has been enlarged to include equity holdings and provide Portfolio support. In addition to equity derivatives, Version 3.0 covers all formerly defined IRD products in FpML Version 2.0, in addition to FX products such as FX Spot, Forwards, Non-deliverable forwards, FX Swaps and FX OTC Options, which makes it the very first FpML model to cover different asset categories.” A new ‘Tools’ section of this FpML site references twelve current tools (Storage Tools, Development Tools, Program Components, Service Components) and listing of sellers; this source is utilized to “encourage the advancement and service of FpML utilities or tools, and this will facilitate the widespread adoption and use of the FpML standard across the OTC financial industry.” [Full context] [January 25, 2002] “ISDA and FpML.org Integration Finalized.” FpML.org and ISDA finalized documents assigning assets regarding the FpML standard to ISDA. Today’s activity is the last step in the integration process commenced to combine ISDA strengths using FpML’s technology base for sharing information on, and coping. In recent action, a Trial Recommendation has been issued a week to get FpML Version 2.0, the XML-based, freely licensed, e-commerce standard supporting OTC trading of financial derivatives. FpML Version 2.0 extends interest rate product coverage to add interest rate alternatives such as swaptions, caps and floors, and extends the swap aspect to add FX resetables, cancelables and premature termination provisions…” [January 21, 2002] FpML Version 2.0 Published as a Trial Recommendation. A posting from Steven Lord (FpML IRD Working Group Chair) announces the release of FpML Version 2.0 as a Trial Recommendation, and encourages implementation feedback. The specification is open for public comment according to the FpML Standards Committee. The Financial Products Markup Language (FpML) is “a protocol enabling e-commerce activities in the sphere of financial derivatives. It is an application of XML, made by FpML.org to permit the digital integration of a array of services, from electronic trading and confirmations to portfolio specification for risk evaluation. All sorts of over-the-counter (OTC) derivatives may, over time, be incorporated into the normal, even though the current concentration of FpML Version 2.0 is interest rate derivatives.” The FpML 2.0 Trial Recommendation incorporates feedback received from the FpML 2.0 Last Call Working Draft (02-November-2001). The standard isn’t expected to advance to status until execution feedback has been received. Mixed Focus Strengthens Technology Supporting Electronic Trading of Financial Agreements.” – “FpML.org (FpML) has declared that FpML as well as The International Swaps and Derivatives Association (ISDA) have agreed to incorporate the FpML standards development process to ISDA… The FpML initiative will function as an ISDA committee and related working groups and will continue to communicate via the www.fpml.org site. Brian Lynn, co-chair of this FpML.org Standards Committee, said that the Committee retains responsibility for brand new variants of their standard. ‘Powerful input from sellers is a key success factor for its development and adoption of this standard,’ Mr. Lynn explained. ‘Vendors will continue to be represented on Working Groups and on the Standards Committee.’ ISDA is the global trade association representing leading participants. ISDA was chartered in 1985, and today has more than 540 member institutions. These members include the majority of the world’s leading institutions that deal in privately negotiated derivatives, in addition to many of the businesses, governmental entities and other end users that rely on over derivatives to manage efficiently the financial market risks inherent in their core economic activities… FpML.org is comprised of volunteers from some 30 companies who take part in the Board of Directors, the Standards Committee or as members of Working Groups. Volunteers are employees at information, banks and applications vendors, and systems integrators. FpML is a freely licensed benchmark designed to encourage the electronic dealing and processing of financial derivatives involving trading partners, including monetary institutions and their customer community.” See also the “Talking Points for the FpML/ISDA Integration.” [August 08, 2001] “Reuters Use of FpML 1.0 in New Internet Trading System Indicates Growing Industry Acceptance, states FpML.org.” – “Planned utilization of FpML 1.0 by Reuters in a new Internet-based system for dealers in the Overnight Index Swaps (OIS) market is a very clear indication of the new benchmark’s general industry endorsement, Brian Lynn, co-chair of FpML.org’s Standards Committee stated today. Lynn, FpML software supervisor at JP Morgan, and a vice president accountable for systems, is one of many securities industry volunteers working to develop the new benchmark for Online trading of OTC derivatives. Mark Robson, Reuters Director, Business Development, Money Transaction Solutions, stated, “Dealing for Swaps, an enhancement to Reuters Dealing 3000, will utilize FpML version 1.0 to export commerce data. We aim to establish the service in the autumn.” He explained Dealing for Swaps as “a safe, browser-based solution letting traders in the OIS market to market their workflow, structure trade negotiations, reduce processing costs and improve their overall efficiency.” The enhancement will be accessible via Reuters Dealing 3000 and delivered within the Radianz system. Lynn stated, “Reuters is an active player in developing FpML and today becomes one of the early adopters of this standard. Reuters has dedicated four employees to functioning with FpML.org and now is a major contributor to our business enterprise Message and Architecture along with also our FX options working classes.” He added, “The success of the standard is based on volunteers from multiple industry segments donating their time to address the myriad technical issues involved in simplifying the flow of information across the entire derivatives system.” FpML is the XML-based, freely accredited e-Commerce standard. FpML.org is a non-profit consortium comprised of leading global derivatives trading institutions, fiscal, consulting and technology companies. Model 2.0, covering interest rate options such as caps, floors and swaptions, will be released for trial recommendation later this year.”