Citigroup Deploying FpML for FRAs and Swaps

LONDON, Apr. 25 - Financial products Markup Language is being deployed by Citigroup to support internal confirmation processes for OTC Forward Rate Agreements and Swaps, attendees at the FpML Spring Forum learned yesterday. Pauline Jones of Citigroup's London office said that FpML is an integral part of the company's new Internet financial confirmation (iFinCon) process now in advanced development.

"As a standard supporting OTC trading of financial derivatives, FpML meets key requirements in our new confirmation processes," Ms. Jones said. "We wanted an easily deployed standard to quickly match and confirm communications between counterparties to FRA and Swaps agreements. This is now being achieved internally."

Ms. Jones explained that auto matching of counterparty correspondence in iFinCon is based on the standard structure of FpML. "Our internal deals represented in the form of FpML are compared and matched against each other," she said. "This process will extend to comparing and matching incoming FpML confirmations. Benefits include ease of validation for correctness and completeness of data, ease of processing, ease of deployment and lower processing costs."

According to Ms. Jones, FpML lends itself for automatic compliance with emerging standards. "It makes business-to-business communications easy as it is based on XML technology," she said "FpML makes it possible for our design team to lay future architecture for Citigroup OTC derivatives trading."

The FpML.org Spring Forum included updates on the standard and presentations on its use and future direction. Breakout sessions covered proprietary vs. industry financial standards, solutions for straight-through processing, XML tools and details on FpML activities regarding interest rate derivatives products and equity derivatives/FX products.

FpML.org is a consortium comprised of financial, technology and consulting firms. The standard is freely licensed and is intended to automate the flow of information across the entire derivatives partner network, independent of the underlying software or hardware infrastructure supporting activities related to these transactions.

Organizations actively participating in the FpML standard:

Bank of America - BNP Paribas - Citigroup - Credit Suisse First Boston - Deutsche Bank - Mizuho Capital Markets Corporation - Goldman Sachs - International Business Machines - JPMorgan - Morgan Stanley - PricewaterhouseCoopers - Reuters - SunGard Trading and Risk Systems - SwapsWire - S.W.I.F.T. - - UBS Warburg
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