The FIX Protocol was originally developed to facilitate improved communications between buy-side and sell-side market participants, however over recent years significant interest and adoption has been generated from exchanges and liquidity venues. Increased standardisation within this sector is of significant benefit to the industry and FIX 5.0 Service Pack 2 includes enhancements to support this goal.
Building upon the functionality delivered by FIX 5.0 Service Pack 1 released in April 2008, Service Pack 2 includes 19 Extension Packs contributed by industry participants to meet the requirements of the rapidly changing financial markets. A prime example of this are the enhancements included to support the expanding needs of trading venues such as the London Stock Exchange (LSE), which will adopt FIX 5.0 Service Pack 2.
FIX 5.0 Service Pack 2 offers additional messaging support to a wide range of areas including, but not limited to:
â¢ Enhancements to identify standardised Credit Default Swaps (CDSs) for clearing, an initiative that proactively works toward government efforts to help support the future risk environment
â¢ Enhancements to support the needs of the LSE
â¢ Enhancements to support the trade capture requirements of the Commodity Futures Trading Commission (CFTC)
â¢ Improvements to the delta position limit functionality offered by The Options Clearing Corporation (OCC)
â¢ New set of Parties Reference data messages set to support the dissemination of party relationships and risk limits
â¢ New messages to support real time pre-trade market data stream assignments by price makers when prices are distributed via third party distribution channels
â¢ Enhancements for identifying New York Mercantile Exchange (NYMEX) energy products and Unit Of Measure
â¢ Enhancements to support Foreign Exchange Non-Deliverable Forwards (NDFs)
â¢ Enhancements to support exotic options products
Commenting on this development Ryan Pierce, Technical Director at FIX Protocol Ltd. stated âFIX 5.0 Service Pack 2 has been developed as a market-driven initiative, working in close collaboration with trading venues and regulators to ensure that the benefits of standardisation can be enjoyed by the wider community. Additionally, by making these enhancements accessible in a Service Pack format, firms will be able to benefit from ease of implementation, which ultimately reduces the financial and resource investment required to adopt the new functionality.â
Robin Paine, Chief Technology Officer at the LSE added âThe introduction of a FIX 5.0 interface to TradElect is an important part of our technology strategy. The FIX Protocol has been adopted globally, and is being used by an increasingly high proportion of our customers. FIXâs standardised nature will make it quick and cost effective for existing and new customers to access trading on our order books, while its flexibility will enhance our ability to deliver richer functionality.â
Matt Simpson, FPL Global Technical Committee Co-Chair and, Associate Director, Enterprise Architecture at CME Group added âThe new CDS capabilities that have been added to the FIX Protocol allow the CME to offer clearing services on standardised CDS products in a way that leverages existing post-trade capabilities.â