The FIX Protocol: An Overview

October 10, 2001

Abstract

Boston, MA, USA October 10, 2001

The Future of the  FIX Protocol

The future of FIX includes expanded asset classes and new formats, but equities players will likely not use the standard beyond its current incarnation.

In a new report entitled “ ,” Celent Communications looks closely at the development of the FIX protocol, including its current and potential uses. The protocol is now the closest thing the securities industry has to a full-blown standard, and we expect grow in usage, especially as it becomes a major factor in the industry’s move towards Straight Through Processing.

FIX is flexible, having been used by firms for various functions, from Indications of Interest (IOIs) to administrative messages. FIX is also platform independent, and its benefits have been well reported. In keeping with these benefits, an entire new market inside financial services technology has opened up.

“But FIX is not a panacea for electronic communications in the financial markets,” according to Fritz McCormick, author of the report. “Its purview is largely the trade creation and execution space. The post-trade process is still dominated by proprietary standards or none at all. Further, FIX has yet to take serious hold in asset classes beyond equities, although recent versions have been expanded to include foreign exchange and fixed income.” Equity firms using FIX may not have the stimulus or desire needed to evolve the protocol, possibly creating a divide among users; those using new formats for expanded trading and technological capabilities, and those using older versions that work well in their trading environments.

Mr. McCormick adds that even with some shortcomings “the FIX protocol will continue to act as the main force behind increasing automation in the securities industry. Firms looking to cope with issues such as STP and T+1 will need to embrace standards like FIX to help make automation in the securities industry a reality."

A Table of Contents is available online.

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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

 

Boston, MA, USA October 10, 2001

Return to Abstract

INTRODUCTION 3
OVERVIEW 4

 

What Is It?

4

 

Chronology

5

FIX BENEFITS 9

 

Real-Time Capabilities

9

 

Market Expansion

10

 

Flexibility

10

EXPANDING FIX 12

 

FIX, XML, and The Back Office

14

FIX SOFTWARE VENDORS 17

 

Cameron Systems

20

 

Financial Fusion

21

 

FIX Express Corp.

22

 

Inforeach

22

 

Javelin Technologies

23

 

Silicon Summit

24

CONCLUSIONS 25

 

        

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