What is FpML™?

FpML™ (Financial products Markup Language) is the open source XML standard for electronic dealing and processing of OTC derivatives. It establishes a protocol for sharing information electronically on, and dealing in swaps, derivatives and structured products.

What do you mean by XML standard?

FpML is based on XML (Extensible Markup Language), the text-based meta-language for describing data shared between applications. FpML defines the “templates” (structure and semantics) using XML language for exchanging data on the OTC derivatives market.

But, is FpML an application for confirming trades?

No, it isn't. FpML provides the standard data content and structure to exchange derivatives transactions electronically. FpML is an open data standard but it is not an application, nor service. There are companies that provide such services. In most of the cases, they use FpML but purely as standard for electronic message communication.

Do you have any tools to show how FpML works?

Yes, we do. The FpML Editor/Viewer is a good example of a tool showing how to create, edit, and modify FpML documents. It is available on the FpML website at http://www.fpml.org/services/editor/ and it is free for all ISDA members.

Who are the main users of FpML?

Dealers, asset managers, hedge funds, service providers, technology companies are the main users of FpML.

What is the product coverage?

• IRD: Interest Swaps, Swaptions, FRA’s, Caps and Floors, Inflation Swaps and Bullet Payments.
• FX: Spots, Foreign Exchange Swaps, Forwards and FX Options.
• Credit: Credit Default Swaps, Credit Default Indexes, and Baskets.
• Equity: Equity Swaps, Equity Options, Variance Swaps and Total Return Swaps.

Besides these derivative products FpML™ has a description of a broad group of underlying assets, which can be underlying assets to the derivative transaction or can be used e.g. for pricing and risk purposes. FpML™ also has a description of loans and deposits.

More information is available at: http://www.fpml.org/spec/

Does FpML cover product description only?

No, it doesn’t. In addition to the product description in XML format, FpML defines a set of business processes. The FpML specification describes the data that needs to be exchanged within these processes, as well as the message flows. Examples of processes include Request for Quote, Confirmation, Affirmation, Novations, Terminations, Increases, Amendments, Credit Event Notice, Allocations, and Cash Flow Matching.

How can I get started?

The FpML User’s Guide provides a good starting point to implementers on how to use FpML. It suggests applications for FpML, describes at a high level how to write FpML and provides guidance on related topics.

The FpML specifications provide a detailed description of the standard and its different components. The specifications contain the schemas and the examples, which show how to use FpML for specific derivatives products and processes.

I want to contribute, how can I do that?

FpML is an open source project so it is open to everyone interested. The FpML website provides information about the different working groups at http://www.fpml.org/wg/

If you want to join a working group, go to the following page http://www.fpml.org/lists/ and fill out the participation form.

Is it possible to customize FpML for my own needs?

Yes, it is. Extensibility is one of the main features of FpML and XML in general. The FpML Architecture Specification 2.0, available on the FpML website under the Specifications section (http://www.fpml.org/spec/2004/rec-fpml-arch-2-0-2004-05-14/), has a section describing how to Extend/Customize FpML. The section provides technical details and examples of how to do it.

The FpML training course, offered in London and New York, has a specific module on customizing FpML.