FpML version 5.0 An introduction Sept. 2007 Karel Engelen, ISDA Andrew Jacobs, Handcoded Marc Gratacos, ISDA Brian Lynn, Global Electronic Markets

Agenda Major vs. Minor Releases Technical/Architecture Changes in 5.0 Possible Changes in 5.0 Business Content Changes in 5.0 Materials Distributed for 5.0 Conclusions KEngelen

Major vs. Minor Releases Minor versions can add new functionality but are limited Instance documents must be backward compatible No deletions/changes to existing elements Legal technical/architectural changes are limited Major versions can Introduce more significant technical/architectural changes Redesign existing product representations Version 5.0 is intended to introduce technical or design changes that have been deferred for compatibility reasons AJacobs

Architectural Changes in 5.0 Currently implemented architectural changes Multiple Root Elements Introduction of “Views” These will be included in first 5.0 Working Draft Feedback is requested while other 5.0 features are being implemented AJacobs

Multiple Root Elements FpML v 1-4.x uses “<FpML>” as the root of all documents FpML 4.x uses “xsi:type” to distinguish between message types, e.g. <FpML version=“4-3” xsi:type=“RequestTradeMatch” … > FpML 5.x uses different element names to distinguish between message types (no <FpML> root any more) Changes “version” to “fpmlVersion” to make it easier to determine where the FpML starts, e.g. <requestTradeMatch fpmlVersion=“5-0” … > AJacobs

Example of Multiple Roots FpML 4.3 FpML 5.0 AJacobs

Rationale for Multiple Roots Easier to understand than xsi:type Certain tools (e.g. binding frameworks, some editors) have problems with xsi:type AJacobs

Multiple Roots Questions about multiple root elements? AJacobs

Introduction of “Views” Objective of views Views in 5.0 Example of views Business processes by view Implementation of views Impact on FpML users MGratacos

Objective of views Existing FpML has normally has a single representation for each product (some products have short form and long form) FpML product representation is primarily designed for confirmation Many details, precise description It may be difficult to use FpML when not all detail is known/needed, e.g. Pretrade: structuring, negotiation Summary reporting Making most/all elements optional would make confirmation too loose Views are intended to provide multiple product representations, from very loose to very tight MGratacos

Views in 5.0 FpML 5.0 currently supports 3 views Pretrade Reporting Very loose product representation Things like parties, notionals, and dates are optional Everything in confirmation view is available (maybe optional) Reporting Intermediate representation Key economics are required (notionals, key dates, parties) but details are not (e.g. date adjustments) Confirmation As current 4.x product representation MGratacos

Example Pretrade IR Swap, for RFQ Required Optional Floating rate index Optional Payer/receiver parties Effective and Termination dates Calculation Frequency Payment date details Notional Fixed Rate Day Count Fraction Adjustments MGratacos

Example Reporting IR Swap Required Optional Floating rate index Payer parties Effective and Termination dates Notional Fixed Rate Optional Receiver Parties Calculation Frequency Payment date details Day Count Fraction Adjustments MGratacos

Example Confirmation IR Swap Required Floating rate index Payer/receiver parties Effective and Termination dates Notional Fixed Rate Calculation Frequency Payment date details Day Count Fraction Adjustments MGratacos

Business Processes by View Pre-trade RFQ Confirmation Confirmation, Post-trade event confirmation Reporting Everything else, e.g. Allocation Contract Notification Reconciliation (cash flow and portfolio) Valuation reporting Post-trade event negotiation MGratacos

Views - Implementation FpML maintains a single master schema Master schema contains annotations with view-specific details, “make this optional in view X” “put this only in view Y” FpML publishes separate view-specific schemas, one per view Each view is generated from the master prior to publication Each view has documentation and examples Each view-specific schema will have its own namespace, e.g., http://www.fpml.org/FpML-5-0/pretrade End users will use a view-specific schema, not the master MGratacos

Views - Impact FpML users must decide which view (schema) to use for a given application/system Business processes are generally contained in a single view Some messages may be available in several views (e.g. “MessageRejected”) Once the view is selected, instance documents should be closely compatible with previous FpML versions Choosing a looser view (e.g. pre-trade) allows more flexibility about what data must be included in an instance document MGratacos

Views - Impact Extensions will be impacted by the views Extensions will need to import the appropriate views (e.g. <xsd:import namespace=“http://www.fpml.org/FpML-5-0/pretrade” …> Extensions applicable to multiple views will need to be duplicated MGratacos

Views - Feedback Requested Number/purpose of views Business processes per view Product representation per view Issues related to in-house extensions MGratacos

Views Questions about views? MGratacos

Possible Changes in 5.0 Product representation Message architecture A task force is starting to look at refactoring product designs Aim for increased consistency across asset classes Better support for multi-feature and hybrid products More generic FX option product representation Message architecture Discussions are on-going about rationalizing/ refactoring message set to improve consistency and completeness Identification There are ongoing discussions about trade, event, and business process identification that may result in changes These are not major technical changes, but must be in a major version due to backward incompatibility AJacobs

Business Content Changes in 5.0 Currently, plans are for NO “new” business content in 5.0 No new products No new product features No new business processes EXCEPT possibly as below As a result of the refactoring/redesign, there may be new business capabilities in 5.0 Pre-trade capability across many products New messages (more complete and consistent) More flexible product capabilities (e.g. combinations of features) AJacobs

Business Content Changes in 5.0 In addition, deprecated structures in 4.x versions will be removed, e.g. A2A Messages (TradeCreated, etc.) Equity Swaps Contractual Supplement some minor date-related options AJacobs

Business Content Changes in 5.0 Questions about business content changes? AJacobs

Materials Distributed For 5.0 Initial distribution (will probably change a little) Zip files, contents HTML Documentation Schema and examples BLynn

Version 5.0 - Zip files, contents ZIP files of view-specific HTML documentation ZIP files of view-specific schemas and examples Unpack ZIP files to see contents BLynn

Launching HTML Documentation Unpack ZIP files to see content Double-click on Index.html for menu version BLynn

Overview of HTML Documentation Specific view shown at top Section 2.1-3 discusses views Click on link to go to section BLynn

Documentation differences between views Specific view shown at top Section 3 (Bus. Processes) varies by view BLynn

view-specific examples Schema and examples Directories for view-specific examples View-specific schema files Unpack ZIP files to see contents BLynn

Conclusions Version 5.0 introduces a number of technical changes Multiple root elements Multiple views Version 5.0 may introduce additional changes Product and message refactoring Version 5.0 won’t add new products or business areas Existing product and business areas may become more flexible Version 5.0 is distributed using several .zip files BLynn

FpML 5.0 Questions on any aspect of version 5.0? (All)