FpML

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FpML
FpML Logo.jpg
Founded 1999
Headquarters New York
Products Open source XML standard for electronic dealing and processing of OTC derivatives
Twitter @@FpML
Website fpml.org

FpML stands for Financial Products Markup Language, an industry standard protocol for complex financial products. It is based on eXtensible Markup Language, or XML, the standard meta-language for describing data between share applications.[1]

FpML, which is developed and promoted under the guidance of the International Swaps and Derivatives Association (ISDA), is the business information exchange standard for electronic dealing and processing of financial derivatives instruments. It establishes a protocol for sharing information on, and dealing in swaps, derivatives and structured products, and uses ISDA derivatives documentation as its basis.

The standard, which is freely licensed, is intended to automate the flow of information across the entire derivatives partner and client network, independent of the underlying software or hardware infrastructure supporting the activities related to these transactions.

FpML is of value when the direct communication of derivative trade descriptions and environment information between two firms is desired. Ultimately, it will allow for the electronic integration of a range of services, from Internet-based electronic dealing and confirmations to the risk analysis of client portfolios.

Background

As the interest rate swap market grew throughout the 1980s and 1990s, and as demand grew for electronic transfer and storage of market data and messaging, it became clear that a standard would be needed. In 1997, JP Morgan a research project to develop the methodology by which these instruments can be traded using e-commerce technologies. By 1999, with the aid of accounting and consulting firm PricewaterhouseCoopers, a draft standard was announced and other financial firms were brought in to help develop the standard. Together they established FpML.org as an independent organization. [2]

FpML 1.0, which covered vanilla interest rate swaps and forward rate agreements (FRAs) was released for public review in early 2001, and was formally endorsed later that year. Subsequent versions of the standard added more complex interest rate swaps, as well as additional asset classes such as FX, credit default swaps and agricultural swaps. On November 14, 2001 ISDA and FpML.org announced their intention to integrate the development process of the FpML standard into the ISDA organizational structure.

Now in its fifth generation, FpML covers the full spectrum of derivative products, including interest-rate, foreign exchange, credit derivatives, equities and commodities. In May 2013, ISDA announced its recommendations for version 5.5, which includes technical standards approved by the European Securities and Markets Authority (ESMA), as well as new coverage of certain equity and FX derivative products. For more on the current status and future versions of FpML, view the FpML technical roadmap.

References

  1. FpML At a Glance. FpML.
  2. In the Beginning. FpML.