The FpML Version 1.0 specification, providing XML-based trade and product definitions for the OTC interest rate derivatives market, has succesfully completed a public review period, reports Matt Meinel, co-chair of the non-profit consortium's Standards Committee.
FpML.org is developing the freely licensed FpML standard to automate the flow of information across the derivatives industry, independent of the underlying software or hardware infrastructure supporting the transactions.
Organisations actively developing the FpML standard include Bank of America, BNP Paribas, Citigroup, Credit Suisse First Boston, Deutsche Bank, Mizuho Capital Markets Corporation, Goldman Sachs, International Business Machines, JPMorgan, Morgan Stanley, PricewaterhouseCoopers, Reuters, SunGard Trading and Risk Systems, SwapsWire, Swift, and UBS Warburg.
Meinel says the endorsement of the Version 1.0 spec is a major milestone in establishing FpML as an industry standard. "Its adoption by market participants will substantially reduce the estimated $1 billion spent annually processing OTC derivatives," he says.
According to the latest survey conducted by the International Swaps and Derivatives Association (ISDA), global OTC derivatives volumes increased by 8.14% in the year ending December 31, 2000. Volumes globally totaled $63.009 trillion of notional at year-end.
Version 2.0 of the standard, currently being developed, will extend the product coverage to include interest rate options such as caps, floors and swaptions.
Other current FpML.org working groups are focusing on business messages and architecture, foreign exchange and equity derivatives products.