January 2000 J.P. Morgan FpML Prototype Application

1. January 2000J.P. MorganFpML Prototype Application

2. What FpML prototyping efforts are underway at J.P. Morgan ? • J.P. Morgan is prototyping internally with FpML to learn more about applying the standard to real business problems • We also plan to experiment using new workflows with selected counterparties as part of this learning process.

3. Prototype Overview • The prototype application shown in the following slides demonstrates possible workflows and how an FpML message may be passed between firms during either pre-trade negotiation or post-trade execution • J.P. Morgan is sharing some of its ideas here to stimulate discussions around FpML prototyping. The views expressed are our own and not those of FpML.org.

4. 1 2 3 Three in-trays help manage the trade workflow between the parties involved in a swap transaction. In the J.P. Morgan view shown above there is no outstanding activity.

5. Through a trade capture process, either web based or from a separate application, the economic terms of the trade are entered. Here J.P. Morgan is entering into an interest rate swap with ACME Bank (ACME).

6. The trade capture process is capable of generating an FpML message which is posted to a central web server.

7. In the J.P. Morgan view the submitted trade appears in the Awaiting Counterparty Attention in-tray. In the ACME view the trade appears in the Requires Your Attention in-tray.

8. Clicking on the in-tray Affirmation link, ACME is able to view the complete trade details. This HTML page is generated dynamically from the FpML. In the example, ACME is requesting a change to the trade terms.

9. ACME submit their query request which appears in the J.P. Morgan in-tray with a Review Query action. J.P. Morgan review the request. They agree to make the change and enter a comment to this effect. They submit an edit request.

10. ACME are able to monitor the progress of their request. The counterparty action has changed to Edit Requested. They can also review any comment entered by J.P. Morgan.

11. The edit is made through the original trade capture mechanism which generates an updated FpML message. The amended trade is posted back to the server for counterparty review.

12. ACME are presented with the revised trade for affirmation. The comment history provides additional context when reviewing the trade. ACME affirm the trade if they are satisfied with the changes.

13. The affirmed trade moves to the Completed Trades in-tray for both parties. This may trigger further processing in downstream applications with the FpML message being passed as the trade record.

14. The FpML representation of the trade is available at all stages of the workflow process and is available for download by either party.

15. Alternative Operating Model • In this example both parties connected to a centralized server. This is one possible approach • An alternative operating model could be that the FpML is physically sent between the parties and each firm would use its own workflow manager.

16. This communication is for informational purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction, unless specifically agreed otherwise. All market prices, data and other information are not warranted as to completeness or accuracy and are subject to change without notice. Any comments or statements made herein do not necessarily reflect those of J.P. Morgan & Co. Incorporated, its subsidiaries and affiliates.