FpML Issues Tracker

1295: DRR model needs to source Last available spot price for notional calculation for Commodity Basis Swaps

March 29, 2023

closed

Tweak

Always

Coding Scheme

5.13 Second Working Draft (Build 2)

XAPWG

mgratacos

jbaserba

Summary

CDM already supports required concepts. The element needs to be added in FpML to support input data to then develop test for modelling approach. The proposal is to add a new LastAvailableSpotPrice value to the measure type coding scheme.

Notes:

  • mgratacos

    04/06/23 8:18 am

    Proposal sent to the FpML XAPWG.

  • JasonPolis

    04/26/23 1:20 pm

    MG to ask ISDA (Andrew Bailey) to clarify definition in EMIR with ESMA.

  • JasonPolis

    04/26/23 1:45 pm

    For commodity basis swaps, the CDE Notional Amount definition states: Commodity basis swaps and similar products: Product

    of the last available spot price at the time of the transaction of the underlying asset of the leg with no spread and the total notional quantity of the leg with no spread.”

     

  • mgratacos

    05/02/23 11:40 am

    For commodity basis swaps, the CDE Notional Amount definition states: Commodity basis swaps and similar products: Product of the last available spot price at the time of the transaction of the underlying asset of the leg with no spread and the total notional quantity of the leg with no spread.”

    We did check with the commodities SME from a bank and the way they compute the Last Available Spot Price is quite specific to them. I cannot share how they do it but based on the specificity of the computation I’d suggest leaving the description generic as “The Last Available Spot Price of the underlyer.”

  • mgratacos

    05/02/23 12:38 pm

    The updated description of the scheme value should be: The last available spot price at the time of the transaction of the underlying asset with no spread.

  • mgratacos

    06/23/23 10:16 am

    The new code was published on June 21, 2023 as part of the new version of the asset measure scheme.

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