The service will be launched in London in early summer, with a late summer launch in the US and an autumn launch in Asia. Not surprisingly, given that Mizuho, Sumitomo Bank and Bank of Tokyo Mitsubishi are members of SwapsWire, Tokyo will be the first centre in Asia to see the service come online. It will be rolled out in other financial centres such as Hong Kong and Singapore after that. SwapsWire will begin its service with vanilla instruments first, and eventually expand into more complex areas, says spokesperson Henry Hunter. SwapsWire uses structured messages to transfer deal information between users and between computer systems.
Structured messages are the key to straight through processing.
FpML is based on XML, the internet standard for B2B automation. FpML was originally an initiative of JP Morgan and PricewaterhouseCoopers to enable e-commerce activities in the field of financial derivatives. It is now run as an industry-wide initiative with a wide range of representation on the various committees and working groups. FpML version 1.0 was released last year, and version 2.0, which will extend product definitions to include interest rate caps, floors, swaptions, basis and cancellable swaps, and early swap termination, is under review, but likely to be finalized soon. A number of the financial institutions that hold an interest in SwapsWire are also represented on the FpML Board of Directors and Standards Committee.