Not Your Father’s FIX

Terry Flanagan

FIX messaging evolves to support algorithmic and multiasset trading.

FIX has evolved from a trade execution messaging protocol to become the de-facto messaging standard for pre-trade and trade communication globally within the equity markets, and is now experiencing rapid expansion into the post-trade space, supporting straight-through processing (STP) from indication-of-interest (IOI) through to allocations and confirmations.

From this foundation, the protocol is gathering increased momentum, as it continues to expand across the Foreign Exchange, Fixed Income and Derivative markets.

“FIX is becoming the market standard across not only execution data but market data, allocations and other asset classes, and investment firms will increasingly adopt it in order to help reduce their integration costs,” Bob Santella, head of U.S. trading software and brokerage at SunGard’s capital markets business, told Markets Media.

FIX, a financial messaging standard that’s managed by FIX Protocol Ltd., is used to communicate trades and associated information between the parties to a transaction. Over the years, films have employed FIX “engines” to manage the creation and distribution of FIX messages, both internally and externally.

However, the rapid growth of high-speed trading, with the attendant capability to span continents, has required firms to extend their FIX engines into a “FIX infrastructure” or “ecosystem.”

The fragmentation of liquidities at a global scale, the sophistication of execution strategies and the imperatives of risk management, resilience and transparency have redefined execution as a function of a composite list of FIX data – the order details as recorded in the FIX message – and data around the trading data – the latency of the FIX links, the risk materialized by the order, the reliability of the electronic link to the proposed execution venue etc.

An example of a FIX ecosystem is CameronTec’s Catalys, an approach to FIX connectivity that CameronTec brought to market about 15 months ago and which has progressively built a following in the market.

A group of leading IT infrastructure vendors is working to deliver a new level of high performance solutions to the global electronic trading community, including FIX messaging and covers recognized interparty legs in the trade cycle (compatible with the goals of the FIX Protocol Ltd interparty latency working group).

“Grounded in synergistic business and technology relationships, we see a crucial role in connecting the moving parts to fast track clients to the ever evolving leading edge in trading technology capability,” said David Blandford, vice president for FSI solutions at OnX, one of the consortium’s members.

Future projects for the consortium phased through will include further FIX engines by request and extend to order management systems, market data processing, risk management and other functions such as colocation in trading community intensive hosting facilities, all of which operate as the core elements of trading operations of today.

Firms are extending their middleware—the software that glues applications together—to deal with complexities of cross-border, multi-counterparty transactional products.

Rapid Addition, a provider of FIX and FAST related software solutions, offers its RA-ShortCut line of adapters that plug into Microsoft’s BizTalk middleware platform.

ShortCut for FIX “FIX- enables” BizTalk implementations, allowing them to send and receive FIX messages and to transform and normalize them between other protocols, such as SWIFT, XML and SQL.

It is a specially written adaptor that FIX-enables Microsoft’s BizTalk middleware application, said Tony Corballis, CEO of Rapid Addition.

The BizTalk adapter provides a quick-to-deploy answer for firms looking to streamline transactions from front-office trading platforms to back-office settlement systems or to integrate FIX and SWIFT messaging, the company said.

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