[December 28, 2000] "WeatherML (Weather Mark-up Language) will be the global standard protocol for weather derivatives deal description data. It will enable efficient electronic processing of weather trades, allowing compatibility between systems, reducing trading costs and operational risks. WeatherML will provide increased credibility for the weather derivatives market by signaling to observers that the market is mature enough for standards to emerge. WeatherML will be XML-based and designed to be broadly compatible with other XML data standards initiatives, such as FpML (Financial products Markup Language). XML-based protocols allow data to be presented in a format that incorporates business terminology and is readable by both computers and people. A practical middleware implementation of WeatherML will be developed to enable weather derivative systems to communicate seamlessly with each other, both within and across organizations. The middleware will facilitate straight-through processing (StP) interfaces between front, middle and back office systems, as well as with exchange systems, enterprise-wide risk management systems and data warehouses. WeatherML will be co-ordinated by Weather Risk Advisory, an independent consulting and software company specializing in weather derivatives. WeatherML will be developed in conjunction with a group of key organizations in the global weather derivatives market. The development of WeatherML is a natural consequence of the weather market's growing maturity, as participants are realizing that it is time for common standards to be adopted. Standardization at this early stage will minimize changeover costs for existing participants as well as encourage the entry of new participants. WeatherML will help manage data exchange, with particular focus on simplifying Straight through Processing (StP) and peer-to-peer interfacing between the following: (1) weather derivatives trading systems (front office); (2) weather derivatives risk management systems (middle office); (3) weather derivatives settlements and accounting systems (back office); (4) exchange systems; (5) proprietary weather derivatives pricing models; (6) enterprise-wide risk management systems; (7) data warehouses." [from the Overview]
"WeatherML (Weather Mark-up Language) will be XML-based and consist initially of a single document type definition (DTD), which can be used for the description of a weather derivatives trade. In this document all the defined fields and entries (called elements in XML) will be explained, and an example trade will be expressed in XML applying the DTD. The structure of a WeatherML document allows the user to include one or more trades. A trade can be described with a unique identifier (TRADE_ID) and some other essential information needed for processing. The trade details will then be specified in the trade component. Several trade components can exist in a trade. This allows the trader to combine financial instruments in a single trade, for example, a straddle consisting of two options..." [from the Specification]
References:
WeatherML Overview Draft v1.0. 12 pages. 'This document contains an overview of the WeatherML data standard, including benefits, development timescales and usage scenarios.' [cache]
WeatherML Specification. 'This document contains details of the structure of WeatherML, an example trade, and development timescales for the Data Standard Specification.' [cache]
WeatherML XML DTD - From the specification
Announcement "Weather derivatives community to develop WeatherML, an XML-based data protocol for weather derivatives trade data." [source, [cache]
[December 28, 2000] "A New XML-based Standard for Weather Derivatives Transactions Proposed. WeatherML Aims to Simplify Trading of Weather Derivatives." By Crisitna McEachern. In WebTech Wall Steet and Technology (WST) (December 22, 2000). "XML has taken a strong foothold in the financial services industry, and the weather derivatives market is next in line for a standard trading protocol of its own. The Weather Risk Advisory, a software and consulting company focusing on weather derivatives, is leading an initiative to develop WeatherML, an XML-based data protocol that looks to be a standard for the electronic processing of weather derivatives. The development will be spearheaded on an international basis by the WeatherML Steering Committee, which will include representatives from various areas of the weather derivatives community such as trading organizations, banks, insurers, reinsurers and brokers. The tentative proposal calls for the first version of WeatherML to be released in the second quarter of next year. The WeatherML Steering Committee recently submitted its proposal to the Weather Risk Management Association (WRMA), the weather derivatives industry trade group for its opinion and possible endorsement. WeatherML will be used to tag data on weather derivatives transactions. 'WeatherML creates a standard so people can build an interface from their systems to WeatherML and then communicate with anyone in the market that is using WeatherML,' says Gautam Jain, director at Weather Risk Advisory. He adds that WeatherML would be useful in areas such as streamlining the electronic confirmation of trades and furthering the growth of the weather derivatives market as a whole with the spread of software development for the industry... The proposal and draft aspects of WeatherML are available for comment at . The steering committee is seeking advice and suggestions by interested weather derivatives industry parties before the initial version is released. 'The key thing is WeatherML needs to be used by active traders in the market so there has to be a process where by involved parties can contribute to the standard such that it is useful and practical on a day to day basis,' says Jain. Once the standard is released, users would be able to either build their own interfaces to the WeatherML standard, or they could opt for a 'conversion tool' which Jain says would be a mapping engine to allow users to map proprietary data base information to the standard and vice versa. Although the proposed WeatherML standard will initially only cover transaction information, Jain adds that if it catches on with market participants in the future WeatherML could also incorporate all weather derivatives market data into the standard protocol."
