M855 and M856 are newer rounds developed in the late 1970s by Fabrique Nationale (FN) of Belgium. FN was developing a new 5.56mm belt-fed machine gun they called the "Minimi" (Mini-Machinegun) for entry into the US military's Squad Automatic Weapon (SAW) program. The SAW was to augment, and in many cases replace, the 7.62×51mm M60 made by Saco Defense (now part of the General Dynamics Armament Division). Because there was a lot of resistance to giving up larger, longer-range round of the M60, FN focused on making the SAW perform better at longer ranges than existing 5.56 platforms (i.e., the M16). They did this primarily by developing new bullets: the SS-109 "ball" round and the L-110 tracer.
The SS-109 bullet uses a "compound" core, with a lead base topped by a steel penetrator, all covered in a gilding-metal (copper alloy) jacket. The L-110 tracer bullet has a copper-plated steel jacket and like all tracer bullets, is hollowed out at the base and filled with tracing compound. Both bullets are much longer in length than the earlier 55gr bullets, especially the L-110 tracer, which was designed to trace out to 800m, verses 450m for the older M196 tracer round. Due to their increased length, these bullets require a faster rifling twist to be properly stabilized. The military settled on a twist rate of 1:7, which is a compromise between the 1:9 twist ideal for SS-109 bullets and the 1:6 twist ideal for L-110 tracers.
Remember, the goal of these new bullets was improving long range performance. For example, the SS-109 bullet was proven to have better penetration of the then-current-issue steel helmet at 600m than the M80 "ball" ammo fired by the M60. The M80 ammo was not able to penetrate both sides of the helmet at that distance; the SS-109 bullet could. The L-110 tracers provided a visible trace out to 800m, which was seen as the maximum effective range of the SAW. These improvements in long-range performance satisfied the military and the US ultimately adopted the Minimi as the M249 SAW. They also adopted the new FN bullets and the US specs for the loaded rounds are called M855 and M856.
About the time the SAW was adopted, the M16 "A2 revision" program was underway and it was decided to adopt the new SAW ammo (and its rifling twist) for the M16A2. As older M16A1 1:12 twist barrels were not able to stabilize the longer bullets, the new bullets had to be marked (in countries with older 1:12 rifles) in order to make sure that the new ammo wasn't used in the older rifles. M855 received green painted tips and M856 received orange. M193 is plain and M196 is red.
Take a look at:
Fabrique Nationale (FN)
The Minimi from FN--precursor to the SAW.