Isda releases new draft of FpML 4.0

The International Swaps and Derivatives Association has released the second working draft for Financial products Markup Language (FpML) version 4.0.

FpML is the XML (extensible markup language)-based, freely licensed, e-commerce specification designed to support over-the-counter trading of financial derivatives.

The new draft incorporates the new Isda credit derivatives supplement and the master confirmation released earlier this year. It also permits the referencing of specific reference entity data within credit derivatives transactions.

It is anticipated that FpML version 4.0 will go to so-called trial recommendation status in the third quarter and final recommendation by the end of the year, Isda said.

FpML 4.0 covers covers equity derivatives, including equity swaps and credit derivatives, in addition to interest rate derivatives and forex derivatives, as defined in earlier versions. Technically, FpML 4.0 is a schema-based version that puts a messaging framework around the product descriptions to specify their context and use.

FpML will eventually cover all categories of privately negotiated derivatives.