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Created: March 12, 2002.
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HR-XML Workgroup to Lead Employer Stock Plan Standards Initiative.

A posting from Chuck Allen announces the launch of an Employer Stock Plan Standards Initiative, to be organized under a new HR-XML workgroup. The group will "develop standards for employee stock purchase plans (ESPP) and stock option programs. The principal project goal is to define interfaces to exchange ESPP as well as stock option data between an employer and a plan administrator or broker. HR-XML member companies sponsoring the stock plan workgroup include Oracle, PeopleSoft, SAP, Fidelity Investments, Transcentive, and Watson Wyatt Worldwide. The project also includes participants from a variety of financial services, brokerage, and third-party administration companies. The workgroup plans to deliver the first HR-XML specifications for employer stock programs later in 2002."

From a draft proposal:

Business case rationale: "... electronic interfaces help eliminate paperwork, improve service for employees, better ensure accuracy (versus manual means such as fax or phone), and ensure that employees have access to up-to-date information about what can be an extremely important part of employee compensation. Because there are no standard interfaces to enable communications between HR systems and those of stock plan administrators/brokers, costly custom interfaces currently must be developed for each pairing of employer and administrator/broker. From the perspective of an administrator/broker, a standard interface for stock option and purchase plans will reduce the costs of acquiring new employer accounts. Standard interfaces also will reduce the time it takes to set up new clients with direct interfaces. For employers, standard interfaces also will help reduce integration costs. In addition, standard interfaces will help provide better service levels to employees. For example, a standard interface between an employer and stock plan administrator/broker will make it easier for an employer to affordably deploy related web services through an employee HR portal. For instance, a web service might allow an employee to access current information from the administrator/broker system as well as to execute transactions, such as exercising stock options or purchasing employer stock."

Project relationships: "The stock option bank interface project would complement some of the projects already initiated by the HR-XML workgroups, e.g., activities in the benefits arena. The project does not overlap with any known existing project. There are no known relationships to other standards body initiatives. In developing the proposal, representatives from the Financial Information eXchange (FIX) Protocol and the Interactive Financial eXchange (IFX) Forum were consulted. The proposal also was circulated to the Interoperability Summit list, which includes representatives from OASIS, OMG, OAG, ACORD, ISO, and ebXML."

From the announcment:

To attract and retain employees, many employers reward their employees with stock options and offer employees the opportunity to purchase stock through an ESPP. A third-party administrator or broker often handles the administration of the programs and the exercise of options or selling of stock. Because there are no e-business standards for ESPP and stock option programs, expensive custom interfaces must be built between employer systems and those of the stock program administrator or broker -- or alternatively, the transactions simply are handled via forms, faxes, phone calls, or similar manual means.

"Employee stock purchase plans and stock option programs are important motivators and a much-cherished component of employee compensation," said Daniela Goerke, Development Manager, SAP, and chair of HR-XML's stock program workgroup. "The standards developed by the HR-XML Consortium's stock plan workgroup will provide employers with flexible and cost-effective options for deploying self-service facilities for employees to exercise stock options or purchase stock under an ESPP," according to Goerke.

"Standardized electronic interfaces help eliminate paperwork, improve service for employees, better ensure accuracy, and will help make certain that employees have access to up-to-date information about what can be an extremely important part of employee compensation," according to Lon Pilot, Systems Consultant, Watson Wyatt Worldwide, and HR-XML Consortium President.

HR-XML is a global, independent, non-profit consortium dedicated to enabling e-commerce and inter-company exchange of human resources (HR) data. The work of the Consortium centers on the development and promotion of standardized XML vocabularies for HR. HR-XML's efforts are focused on standards for staffing and recruiting, compensation and benefits, training and workforce management. The Consortium has a membership of companies represented in 22 different countries.

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