Execution is a legal step, which is
defined as the point at which the electronic records within a system become
equivalent to and fully represent a binding contract between two parties.
(in Deriv/SERV reaching the Matched status defines this point)
Affirmation and Confirmation are processes
to reach an end-point where two parties (or three or four in the case of
assignments) have indicated their agreement to an electronic record which
is sufficient to achieve Execution of a contract (whether a new trade or
post-trade event)
The Deriv/SERV platform supports Affirmation
where one party can enter and communicate details of a contract to the
other, where the 2nd party at a minimum responds with their own Trade Ref
Id to achieve a Matched status, but can provide feedback by proposing alternative
definitions for terms presented to them (e.g. different dates, rates, underlying)
and the system enables both parties to communicate until a Match is reached.
The Deriv/SERV platform also supports
matching, where both sides express their view of the terms of a contract
and the system compares their electronic entries, both parties use the
system and / or external communication to resolve the differences until
a match is reached.
Regards, Bill
____________________________________________
Bill Hodgson, First Vice President
DTCC Deriv/SERV Business Development
Warehouse Value Added Services
"Marc Gratacos"
<mgratacos@xxxxxxxxx> Sent by: bpwg@xxxxxxxx
02/08/07 14:44
Please respond to
bpwg@xxxxxxxx
To
bpwg@xxxxxxxx
cc
Subject
FpML-BP minutes 2007-08-01
BPWG
Participants Marie-Paule Dumont (SWIFT)
Lucio Iida (BGI)
Pierre Lamy (GS)
Francoise Massin (SWIFT)
Banu Apers (SWIFT)
Brian Lynn (GEM)
Irina Yermakova (ISDA)
Marc Gratacos (ISDA), chair
Discussion - Views for short-form confirmations
The idea is to use the views mechanism
to separate the schema representation of short and long form confirmations.
Different working groups apply different modelling approaches to the representation
of short and long form confirmations. By applying the views mechanism,
the result should be a simpler schema representation and with less optionality
for both short and long form confirmations.
Even though there was agreement among
participants that this is a very good idea. There were some issues that
were pointed out:
The introduction of views for product
representation adds a new dimension to the views. An analysis is required
to see what product representations are applicable to what business process
views. For example, is the brokerEquity representation applicable for confirmation
or only for reporting processes?
The implementation of this change needs
to be evaluated since it would require a change to the existing prototype
(probably adding more namespaces) and changes to the examples.
There may be other approaches to make
a clearer distinction between long and short form. This may involve an
optional long form container for all elements specific to long form. However,
this would cause that related elements are placed in different locations
within the product representation.
The agreement was to get additional
feedback from the Coordination Committee to see whether participants are
interested in using views to distinguish between short and long form confirmations.
- Trade Execution The relationship with trade affirmation
and between trade affirmation and confirmation is not clear.
The participants in the meeting expressed
that execution, affirmation, and confirmation could be three separate processes.
According to BGI, the trade is executed, and then it gets validated in
the affirmation process before it is sent to a confirmation provider or
to other recipient.
Additional input from institutions is
necessary in order to have a clear definition of the processes.
- Option Exercise/Expiry It will be discussed it in the next
meeting. Marc will circulate a proposal.
Please let me know if I missed any point.
Thanks in advance.
We'll meet again in August 15.
________________________________________________________
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