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Washington, D.C. – July 18, 2002 – The Weather Risk Management
Association (WRMA), the international trade organization of the
weather risk management industry, has debuted WXML, its
electronic
protocol for communicating weather transaction data.
WXML enables traders and other companies involved
in weather transactions to automate the flow of information and have
a standardized format for recording it. This includes the logging
of confirms and settlements of basically any type of contract from
puts and calls to swaps and collars, single station deals to baskets
and spreads, as well as type of deal (temperature, rain, etc.) and
the term of a deal.
"WXML is a flexible, master template that allows
companies to define all the details of a weather transaction," said
Paul VanderMarck, the chair of WRMA's Electronic Protocol Committee
and Managing Director of Weather Risk at Risk Management Solutions.
"Until now, market participants have exchanged deal information
verbally or via fax and then manually entered the information into
their own systems. The establishment of this protocol enables
efficient electronic communication of trade details, reducing
redundant data entry and streamlining mid- and back-office
processes."
A number of WRMA members have already indicated
they will begin instituting the protocol. Companies interested in
using WXML can go to WRMA's website at www.wrma.org to find out
more. WRMA is also exploring the possibility of collaborating with
exchanges to issue trade information using WXML as well as working
with the International Swaps and Derivatives Association (ISDA) to
combine with future versions of its FpML (Financial Products Markup
Language). WRMA is also beginning the process of developing a
protocol for climatic data.
"With nearly 4,000 trades executed
in the market last year and the continuing growth of the industry,
the development of this protocol was a logical step to facilitate
communication between counterparties," said Valerie Cooper,
Executive Director of WRMA. "WXML will also make it much easier for
companies to track and submit the data we need to conduct our annual
survey of the market." WRMA's second survey of the market,
conducted jointly with PricewaterhouseCoopers, was released in June.
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