1st June 2011 Today, a new Working Group of leading sell side banks has been established to engage with ECNs, Exchanges and ISVs to promote the global use of FIX and other industry standards across all fixed income products.
The Working Group members include: BofA Merrill Lynch, Barclays Capital, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan Chase, Morgan Stanley, Royal Bank of Scotland, Société Générale, UBS as well as others and are supported by Expand Research Limited (“Expand”) and Etrading Software Limited (“Etrading Software”).
A majority of the Working Group members are also sponsoring the development of an enhanced FIX specification and domain model that is intended to form the basis of an updated open industry standard for fixed income.
The benefits for the market include:
1. Lower cost of ownership of technology
2. Faster and easier connectivity integration between market participants
3. Faster time to market for new features and products
4. Greater vendor choice and technical flexibility
5. Ability to leverage and re-use IT infrastructure across multiple asset classes
6. Improved supportability of trading platforms across asset classes
“The FIX protocol is widely adopted and successful in other asset classes. The timing is right for the Fixed Income community to look at possible synergies and take the lead to adopt such open protocols", says Stephane Malrait, Global Head of eCommerce Fixed Income and Currencies at Société Générale Corporate & Investment Banking. "The impact of new regulations will be an increasing number of trading venues that require to quickly and cost efficiently integrate with all market participants”
“This initiative will dramatically lower the effort to build and deploy custom connectivity solutions from sell-side institutions to trading venues”, says Sassan Danesh, Managing Partner at Etrading Software. “It also provides a strong opportunity for new and existing solution providers in the fixed income connectivity market to provide innovative new solutions to the community by leveraging open industry standards.”
“This is a critical time for the industry,” says Rupert Bull, Managing Director at Expand Research Limited. “The 'Dodd-Frank' act will have a significant impact on electronic trading through the creation of ‘Swap Execution Facilities (SEF)'. Connectivity requirements will change across the whole market. The Working Group will deliver real benefits to financial institutions, existing ECNs and Exchanges plus the new participants, as well as to the independent software vendors.”
Over the next few months the Working Group will engage with leading ECNs, Exchanges and ISVs to encourage both the adoption of FIX and participation in a collaborative process to enhance FIX and other standards, in order to maximise the benefits of standardisation for market participants.
The Working Group will also liaise with industry and standards organisations in order to migrate the governance for the new specifications to the appropriate standards bodies as quickly as possible.