ISDA Delays FpML Version 5.0

The new version was due for release by the end of last year, introducing greater transparency in reporting fields. Sources say a decision was made to incorporate the work of the recently started collateral working group, which is looking to create messages in FpML to support margin calls and interest payments.

"The initial target completion date of 2009 for the recommendation was modified by the group to expand changes in the messaging framework for this version," says a source familiar with the situation.

The practice in the collateralized over-the-counter (OTC) derivatives market is to exchange margin call notices, confirmations of collateral interest settlement and requests for collateral substitutions without the use of any centrally defined standard message format. These notices are delivered via various media, predominantly e-mail.

Sources say version 5.0 will include a clearer way to link messages together, resulting in improved representation of accounts and roles. There will also be messages for transaction and activity reporting. Version 5.0 will include a redesign of the existing coverage for foreign exchange (FX) and syndicated loans mainly because more products will be added, such as dual currency deposits and range accrual options.

In mid-February, the standards body added coverage for equity derivatives including E.U. and pan-Asia interdealer share swaps, E.U. client index swaps, and U.S. client options in version 4.7 (DWT, Feb. 22). The release also offers improvements for interest rate, commodity and credit derivatives, according to officials at the time.

Maria Daly