Trade v Contract Messages

[steveshutts]

Hi, I am very unclear as to the proper use of Trade and Contract Messages in FpML. It seems that there is currently substantial overlap between the two and that they can be used hand in hand with each other. The documentation states that a Trade Message should only be used to convey the underlying trade and all subsequent events applicable to that trade should be confirmed via the use of Contract Messages. It also seems that there is no existing message to cancel a subsequent event, which was originally confirmed via a Trade Message. For example, if a RequestTerminationConfirmation message was sent for a Partial Termination then how should this be cancelled if required? There seems to be no related Trade Message which can be used for this purpose so how is one to cancel this message? If anyone can help with this it would be much appreciated. Steve

[mgratacos]

Hi Steve, The Contract messages were created exclusively to support the communication between Investment Managers and Custodians. The messages are meant to represent transactions after they have been allocated. There are gaps in the messages so you’ll probably need to extend FpML to be able to cover all messages you need in the system. FpML is aware of the problem in the messaging specification and the Messaging Task Force is currently working on improving it in version 5.0. The plan is that version 5.0 will remove the concept of contract and only trade will be used. Answering your specific questions: 1. You should use the “trade” messages if you are not communicating between investment managers and custodians. 2. Contract will probably be deprecated and replaced in version 5. 3. The messageId element in the message header uniquely identifies each message. 4. As you point out there is a problem in the current spec. In version 4.x you can extend FpML and create you correlation identifier to link the messages or use the conversationId elemet to do the linking. I’d recommend extending it since you’ll be able to enforce its presence in the messages. In version 5, a new correlationId element will be used. I am sure you’ll have additional questions. Happy to help. Kind regards, Marc

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