Eight firms form FpML Steering Committee, stepping up commitment
to derivatives e-commerce standard

Technical committee meetings attract large audiences; additional vendors announce support

Senior derivatives leaders from eight financial firms announced the formation of the FpML Steering Committee. FpML (Financial products Markup Langauge) is a business-to-business e-commerce protocol for derivatives. The Steering Committee signals the firms’ support of the FpML standard at the business level and will guide the FpML organization in its development of the protocol. The announcement follows two major FpML summits that drew hundreds of derivatives industry specialists on two continents.

Initial member firms of the Steering Committee will include Bank of America, the Chase Manhattan Corporation, Deutsche Bank AG, Fuji Capital Markets Corporation (a subsidiary of The Fuji Bank, Limited), J.P. Morgan & Co. Incorporated, Morgan Stanley Dean Witter, Paribas, and Warburg Dillon Read, the investment banking division of UBS AG. A small number of additional members are expected to join the committee in upcoming weeks. The committee will provide senior business-level oversight for development of the standard, including setting priorities and committing resources. Several members of the Steering Committee plan to begin testing prototype trade affirmation workflows using FpML in the near future.

The Steering Committee members are as follows:

• Joseph Bauman, Managing Director, Bank of America
• Tim Fredrickson, Managing Director, Global Head of Fixed Income Derivatives, Warburg Dillon Read
• George James, Head of Global Derivative Products Group, Morgan Stanley Dean Witter
• Frederic Janbon, Global Head of Interest Rate Derivatives, Paribas
• Philippe Khuong-Huu, Managing Director, Global Head of Interest Rate Options and Credit Derivatives Trading, J.P. Morgan
• Jon Kinol, Managing Director, Deutsche Bank
• Simon Lack, Managing Director, Head of e-Capital Markets, Chase
• Gregg Rapaport, Managing Director, Fuji Capital

Assisting the committee as an advisor will be Juan Pujadas, Global Lead Partner for Financial Risk Management at PricewaterhouseCoopers LLP.

The formation of the Steering Committee follows closely two successful FpML events. An FpML Technical Committee meeting in New York on September 27 attracted 125 derivatives industry specialists to learn about the standard. A similar meeting in London on September 21 attracted comparable interest; attendance at the meeting was limited to 45 participants for logistical reasons. Those attending the inaugural sessions included derivatives dealers, software vendors, and professional services providers. Additional meetings to present FpML are planned for November in London and Tokyo.

FpML is based on XML, the emerging Internet standard for data sharing between applications. The FpML protocol enables Internet-based integration of a range of services, from electronic trading and confirmations to portfolio specification for risk analysis. It promises to reduce the cost and improve the quality of risk management for businesses globally. J.P. Morgan and PricewaterhouseCoopers proposed the standard in June and have since developed industry consensus around the standard.

The FpML Steering Committee joins the previously formed Technical Committee, which includes members of derivatives market participants, software vendors, and system integrators. Since the Technical Committee was announced in August, a number of additional members have joined and announced their support of the standard.

"The tremendous industry response we have seen to the FpML proposal shows us that it is on the right track," said J.P. Morgan’s Philippe Khuong-Huu. "Building upon XML has given FpML, and in turn the derivatives industry, a way to handle the complexity and rapid evolution of derivatives activity."

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