FIX Highway Launches Flat-Rate Monthly Fee for Fixed Income Trading10.26.2016 By John D'Antona Editor, Traders Magazine
FIX – New York – FIX Highway today announced the elimination of transaction fees in fixed income trading, replacing that model with a monthly flat-rate alternative.
FIX Highway is a fundamentally different approach to trading – a plug-and-play approach – providing the first and only neutral, independent one-to-many direct access to counterparty liquidity. The new model reduces the cost of trading by as much as 90% and provides and the opportunity for profitability.
Until FIX Highway, electronic trading access in fixed income has been a toll and markup model. In that model, the provider intermediates and charges a fee for each and every transaction that occurs between counterparties.
FIX Highway disrupts the entire current model via its flat monthly fee. By using the FIX messaging protocol and direct connectivity between parties for the messaging, there is no need for a transaction toll. FIX provides the opportunity to move to a monthly flat fee. The result: a simplified process that drives down transaction costs. Additionally, as an independent provider, all parties have the assurance that their information and trading is never conflicted or compromised. The only thing in the middle of the trade is a FIX message.
As larger firms wrestle with staff reductions, cost concerns, and the crunch in bond trading, they can no longer afford the unnecessary costs associated with the “toll” model. Additionally, smaller firms have a significant barrier to entry associated with these unnecessary costs, and as they are reduced there is greater opportunity for an increased number of participants. Gone is the barrier to entry based on technology facilitation costs.
Messages are delivered to parties via real-time streaming and they facilitate live trading. Specifically, Hit/Lift and RFQ workflows between Makers & Takers are available. The service is compliant with any OMS/EMS and is powered by InterDealer Trading Solutions. InterDealer clients can access FIX Highway through their current connectivity.
Said Dan White, Chairman InterDealer and CEO of FIX Highway: “The current mechanisms to access liquidity and trade advantage intermediaries at the expense of investors and market participants. It is a model we seek to improve upon and to provide a platform that truly advantages the fixed income markets as they are going through an electronic revolution.”
Said Stu Sanderson – Managing Director: “FIX Highway is a tool that will not only improve profitability, but enhance overall industry efficiency and the market structure itself. The era of technology facilitation as middleman can now cycle in favor of investors and market participants. FIX Highway is a simple standardized utility enhancing market efficiencies and substantially lowering trading costs. It is a model we plan to continue expanding upon.”
Stephanie Dumont and Ola Persson of FINRA reflect on advances in fixed income transparency.
Investors lack confidence in fixed income data and believe only half is really reliable.
The consortium is creating the first open market electronic trading platform for syndicated loans and CLOs.
Buy-side users can access Tradeweb’s RFQ process while strengthening relationships with diverse dealers.
The Treasury is soliciting public feedback on additional post-trade data transparency.