1 FIX Protocol Limited (FPL) Restructuring and Membership Drive Jim Northey Chair, FPL Global Derivatives Committee FIA Futures & Options Expo November 6, 2002

2 Key Topics FIX Protocol Organization Restructuring Effort Membership Opportunities for all firm types Current Standards Activities FIX 4.4 Status and Implications Next Steps for Global Derivatives Committee

3 FPL Organization – Pre-Restructuring Focused primarily on equities across regional markets: –U.S. Committee –European Committee –Asia-Pacific Committee –Japan Committee All volunteer support Limited to balanced number of buy-side and sell-side firms

4 FPL Reorganization Goals Expand membership to include wider financial community Represent products/services beyond equities Globally coordinate/share expertise in support of education and marketing Provide regions with source of product and implementation expertise, business process for obtaining that support Accommodate protocol implementation stage at both the regional and product level Reduce workload on key FPL members, establishing business processes to allow additional participation for achieving what a handful of people now do Enhance and articulate member benefits Avoid unnecessary bureaucracy/hierarchy Maintain grass-roots and volunteer culture

5 FPL Organization – Post-Restructuring Creation of Global Product Committees –Global Fixed Income –Global Derivatives Established the FPL Program Office for Membership Services Membership open to all firm types –Buy-side Firms –Sell-side Firms –Exchanges –ECNs/ATSs –Utilities –Vendors –Other Associations

6 New FPL Structure

7 FPL Membership Terms & Structure Annual Membership through calendar year (New members join now through year end 2003) Membership is in a committee at the firm level –Multiple individuals per firm can participate –Each firm has one vote per committee Equal membership reflected in pricing –Same fee regardless of firm type –Members join on a per committee basis FPL is a non-profit organization using membership fees to fund FPL activities –Maintained pre-restructuring fee of $8,000 per committee –Reduced cost of global membership to $25,000 (Firm maximum)

8 Global Derivatives Committee Membership Opportunities GeographyBuy-side Sell-SideExchangeUtilityAssociationVendor U.S. Europe Asia Pacific Japan Multi-Region CME CBOE

9 Current Standards Initiatives Fixed Income –Additional changes to support full life cycle Listed Futures and Options Post Trade Support –Trade Capture –Position Management –Allocation ISO/XML –Working with ISO Working Group 10 Pre-trade Trade Post Trade FIXML –Schema based upon FIX 4.3 Errata to meet current commitment –Attempt to address message size issue using Schema technology Interoperability –FpML, SWIFT

10 FIX 4.4 Update FIX 4.4 –Incorporate final round of Fixed Income changes –Incorporate listed futures and options post trade support –Minor improvements –Seen as incremental to FIX 4.3

11 Potential Standards Initiatives SFXL Integration –Securities Financing Corporate Actions –ISO –MDDL Post Trade –Clearing and settlement window notification –Account Transfer

12 Organization Concept

13 Next Steps Expand membership in Global Derivatives Committee – visit or contact Establish a steering committee based upon the full representation matrix Once Steering Committee is in place –Establish committee governance –Establish standing sub-committees Transition active working groups into subcommittees –Identify ad hoc sub-committees Get to work!