1. Proposals to change FpML Messaging

2. Correlation Acknowledgements Exception modelling Advice vs. Notification Corrections On behalf of Trade Roles Trade vs. Contract Messaging Gaps

3. Confusion in the current model on how to identify the context in which the messages will be interpreted conversationId Optional Not well-defined eventId Optional Not in all messages (before 4.2) Forces common content for all messages

4. correlationId Applied to all messages Allocated by the initiator of the business process

5. In a long running operation message ordering is important Each messages messageId is unique But the order of messages can not be inferred by comparing two identifiers Existing implementations (SWIFT-CUG) use trade versioning to derive ordering

6. sequenceNo To define a sequence number Although sequence numbers should be consistently increasing in value they do not have to form a gapless sequence

7. … 7 1 … … Lots more here … …

8. Message TypeSenderReceiverMessageIdInReplyToCorrelationIdSequenceNo RequestTradeConfirmationBANKSERVICEAB/123-BANK/7BANK/1 RequestAcknowledgedSERVICEBANKXZ/567AB/123BANK/7 ModifyTradeConfirmationBANKSERVICEAB/126-BANK/7BANK/2 RequestAcknowledgedSERVICEBANKZX/599AB/126BANK/7 TradeMatchedSERVICEBANKZX/610-BANK/7SERVICE/1 EventAcknowledgedBANKSERVICEAB/145ZX/610BANK/7

9. All requests messages must have an immediate response It allows a more synchronous style of design

10. Worth recognizing errors separately from normal responses Add consistency across exceptions

11. All existing errors can be adjusted to derive from the ExceptionMessage type rather than ResponseMessage

12. A true notification should be something that we can choose to disregard without having to inform anyone else

13. Most of the information we distribute as notifications we expect the receiver act upon rather than ignore Often we would like an acknowledgement of that action (e.g. ContractNotifications, matching results, etc) Really this should be implemented as an advice pattern using a request/response style pattern.

14. Lack of consistency defining correction messages flag has been added to distinguish between correcting vs. Non-correcting messages Used in patterns like distribution

15. There are situations where a third party can not easily tell which side of the trade he is supposed to be processing Neutral view principle Communication to a common third party

16. An explicit indication of the party for whom the trade should be processed is needed It should be included in every message for consistency … Basic message details … … Request specification here

17. false 7 1 … Lots more here … …

18. The addition in FpML 4.2 of the trade side structure allows party roles to be associated with a trade The TradeSide structure is used to capture the role information mixes contractual and processing information Most of these values are only relevant to specific business processes They should be properties of the supporting messages

19. Separation of Party and Account Make relationships clearer Beneficiary or servicing party should be provided

20. Internal trades Current model assumes buyer & seller always different Difficulty to represent internal trades New optional account reference Single party in both sides is possible Info for settlement

21. Other Roles and Accounts Support Give-Ups and custodian account Simpler implementation Less indirection Still Under Discussion

22. Two structures describing the same information Business process need to be duplicated Examples: novations, terminations,… Validation rules need to be duplicated ISDA legal documentation uses transaction. Trade, deal, contract and transaction are often used interchangeably.

23. The contract concept could be removed from the schema and the CUG messages reverted to a trade based model Migrating Contract messages to trade has been analyzed (see separate presentation)

24. Requirements Existing message sequences must follow a Messaging Pattern The Negotiation Pattern The Distribution Pattern The Matching Pattern The Reconciliation Pattern All processes must have an observable completion

25. The Negotiation Pattern In many business processes a series of exchanges are needed between the participants before are an agreement can take place on the final outcome Examples of negotiation include the post trade operations (e.g. amendment, increase, full/partial termination, cancellation, etc.) The Distribution Pattern In many business processes the outcome of the negotiated outcome often needs to be distributed to other parties not directly involved in the negotiation but who have a role in future operations The general pattern for distribution should follow the advice style discussed earlier

26. The Matching Pattern Matching is the process of pairing items (trades, events,…) submitted by their counterparties based on their definition. The Reconciliation Pattern It can take time for the participants to establish the data set they want the process to apply to and as a result the content of the data set may need to be changed before the processing can actually begin. See Appendix for more details on exchange patterns

27. Messaging Gaps have been identified as result of the analysis Scripts for checking will be implemented to avoid future gaps

29. The Negotiation Pattern The Distribution Pattern The Matching Pattern The Reconciliation Pattern

30. In many business processes a series of exchanges are needed between the participants before are an agreement can take place on the final outcome

31. The key points are: The proposing party starts the negotiation and decides when it has reached an outcome that he will accept or abandon the process The other party must always produce an offer based on the last proposal. He will only confirm an acceptance made on his last offer

32. In many processes the outcome of the negotiated outcome often needs to be distributed to other parties not directly involved in the negotiation but who have a role in future operations The general pattern for distribution should follow the advice style discussed earlier The informer would normally like to know that the informed party has received and understood the information.

33. Sometimes an action cannot be accepted At time t0 a contract notification is sent indicating that some action is to be performed at t2 Up until t1 the original notification can be changed or cancelled because it has had no external effect Between t1 and t2 modifying the action becomes more difficult with associated financial costs. Any attempt to modify the original notification should be refused to force the informer to issue a compensating transaction The informer does not know when the informed has entered the grey-area unless the notification can generate a response.

34. Sometimes an advice is sent containing the wrong information The message details are sent to entirely the wrong party. The message is sent to right party but the details are incorrect. Retraction and correction is necessary

35. Matching is the process of pairing items (trades, events,…) submitted by their counterparties based on their definition The status of a trade held within a matching engine is unmatched until one of three outcomes is decided Matched Mismatched Unmatched

36. Cash flow and portfolio reconciliation are both long running reconciliation processes. The process begins with the requester either creating a new data set or adjusting the content of an existing one.

37. Gaps have been identified to FpML 4.5 applying the patterns to the existing business processes FpML 4.5 MessageUpdated ModelPatternComments RequestTradeConfirmation Negotiation Acknowledgement NegotiationNew ModifyTradeConfirmation Negotiation Acknowledgement NegotiationNew CancelTradeConfirmation Negotiation Acknowledgement NegotiationNew TradeMatched Advice Acknowledgement AdviceNew TradeMismatched Advice