FIX Phenomenon

Terry Flanagan

The digital era in finance has been enabled to a large extent by developments that predated the Internet, in particular, the creation of the Financial Information Exchange protocol.

Brennan Carley, who heads the Thomson Reuters Elektron transactions and enterprise platform businesses, has monitored FIX since its inception in the early 1990s. In his view, the communication messaging protocol is almost single-handedly responsible for the electronic cross-border, cross-asset trading systems that have emerged as ubiquitous on Wall Street.

“The widespread adoption of FIX enabled not only the rapid expansion of electronic markets but also played an important role in leveling the playing field between brokerage firms, exchanges and (electronic communication networks), making it possible for firms to compete on price, execution quality and other value-add services,” Carley told Markets Media.

Carley leads Elektron’s business of connecting the buy and sell side, through products such as Autex, the largest global FIX order-routing network.

“The FIX protocol has done nothing less than revolutionize trading and reshape the entire trading ecosystem,” he said. “While electronic trading would have happened without FIX, the rate at which the equities markets have converted to electronic trading would never have been achieved without FIX.”

Thomson Reuters Elektron is built as an open, global, ultra-high speed and resilient network that connects financial-market participants and enables them to share information and trade on a single platform.

FIX has had the greatest impact in order routing, initially in cash and block trading, and more recently in algorithmic and systematic trading. “With our currently fragmented market structure, institutions have increased demand to get trades done in block size, and I expect that FIX based messaging will have a growing impact on the block trading world, primarily in the form of Indications of Interest,” said Carley.



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