Creditex Sets Standard in FpML

Creditex clients can now get their credit-default-swap broker confirms in Financial products Markup Language.

The interdealer broker for the credit-derivatives market has served as a chair for the FpML Credit Derivatives Working Group, and hopes to spark industry growth of the standard, according to Creditex's Chief Technology Officer, Jim Miller.

Miller continues that there has not been much take-up of the standard thus far, as it has only recently been widely distributed. However, he says, "Everyone is starting to think about interoperability. They're going to have to exchange some form of electronic confirm, and need an industry standard to help. As the credit-default-swap market grows, the need for something like this is going to be more and more important."

Up to this point, much of the industry has used spreadsheet or word-document-type formats, explains Miller. With these formats, much manual verification must happen, adding time, work, and potential for error onto the broker's workload.

Using FpML, Miller says, will enable Creditex's clients to reconcile their clients' trades with their brokerages using minimal staff involvement.

A few of the broker's largest clients are currently using the FpML standard for confirms, and others are talking about it, says Miller. If a client is currently XML compliant, bringing on the standard can be easy, he adds, but he concedes that if not, a firm might find the conversion process a bit trickier.

The concept is growing, though, he says, and "by the end of the year, every one of our clients will be demanding FpML."