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RE: FpML-EQD FpML EQD WG Agenda 1400 LDN Fri 30 Nov 2007



Andrew,

Related to validation rules, could we also review this issue
http://www.fpml.org/issues/view.php?id=465 ?

Thanks,
Marc



-----Original Message-----
From: eqdwg@xxxxxxxx [mailto:eqdwg@xxxxxxxx] On Behalf Of
andrew.p.parry@xxxxxxxxxxxx
Sent: Wednesday, November 28, 2007 3:23 AM
To: eqdwg@xxxxxxxx
Cc: andrew.jacobs@xxxxxxxxxxxxxx
Subject: FpML-EQD FpML EQD WG Agenda 1400 LDN Fri 30 Nov 2007

* Telephone Conference

Access Number:  +44 20 8328 1756
Participant Code:       *3039*


* Agenda

1. Actions from our last meeting 1400 LDN Fri 09 Nov 2007

SI: review SwapsWire ISDA 2007 Equity Finance Share Swap proposal with 
Pierre Lamy
SI: follow up with Bin Shen regarding what information other that the 
existing element exchangeTradedContractNearest IS-A boolean may be 
required

RM: provide summary and presentation from ISDA conference on handling 
disruption

AP: propose support for basket underlyer within basket
AP: create more samples for newer products
AP: improve annotation of second order derivatives


2. FpML Co Ord Minutes 19 Nov 2007

Point 1. Regarding the Multiple exchange traded proposal from the DTCC
is 
below

"1.       Multiple exchange traded instrument proposal (See Proposal 
Multiple exchangeId.zip and original e-mail below) 
a.       Andrew Parry described the proposal from DTCC to allow multiple

exchange Id for equity indices. For equity indices, exchangeId indicates

the exchanges from which valuation/price of each constitutent will be 
based in case of disruption.
b.       Participants felt this was overloading the use of exchangeId, 
which is meant to represent the exchange where a stock is traded.
c.       It was suggested to add an additional element within the index 
underlyer called constituentExchangeId (optional, multiple occurrence)
to 
support the business requirement but distinguish it from exchangeId.
d.       FpML underlyers should be refactored in 5.0 to make sure that 
elements present in an underlyer have sense from a business
perspective."


3. Option Features

3.1 Deprecation comment

On the complex type EquityDerivativeLongFormBase we should restore the 
comment that the element equityFeatures is deprecated, which I believe
to 
have been lost in the merge process, because this content is now 
accessible in the complex type EquityDerivativeBase through the model 
group Feature.model

3.2 Consistency

SOTF work was completed before the Citadel proposal on Dividend
Adjustment

3.2.1 element dividendAdjustment IS-A DividendAdjustment should be added

to model group OptionFeature.model
3.2.2 model group OptionFeature.model should then be used to provide the

content model for both complexType OptionFeatures ( EQD ) and
complexType 
OptionFeature ( SOTF )

3.3 Encapsulation

Note that the complex type OptionFeature ( SOTF ) is a container for all

the current accessible features ( fxFeature, strategyFeature, asian, 
barrier, knock, passThrough ), at present ommitting dividend adjustment
as 
noted above


4. Using SOTF work

We should start to consider how SOTF materials can be applied to Equity 
Derivatives

FpML-5-0 is a good opportunity to improve the current Equity Derivative 
models 


5. Business Rules

Andrew Jacobs, Chair of the FpML AWG posed some questions around
multiple 
exercise business rules

All of my comments below relate to the complex type
EquityMultipleExercise

a) "you cannot exercise more than the number of options you have"

maxiumumNumberOfOptions <= numberOfOptions

b) "maximum number of options to exercise must be greater than or equal
to 
minimum number of options to exercise"

 maxiumumNumberOfOptions >= minimumNumberOfOptions

c) "when integral multiple exercise is present, minimum and maximum
number 
of options exercised must be a positive integer multiple"

( minimumNumberOfOptions / integralMultipleExercise ) IS-A Positive 
Integer 
( maximumNumberOfOptions / integralMultipleExercise ) IS-A Positive 
Integer


6. AOB


Andrew Parry
+44 20 7325 1486
Exotics and Hybrids Architecture
JP Morgan

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