Initiative led by 13 investment banks has gathered the support of the principle fixed income trading venues expected to register as SEFs under the Dodd-Frank legislation.
The Fixed Income Connectivity Working Group of leading sell side banks (FICWG) welcomes the overwhelmingly positive response shown by the industry for the promotion of open, standardized protocols for the trading of Interest Rate Swaps (IRS) and Credit Default Swaps (CDS).
Launched by the global investment banking community in June 2011 and supported by Etrading Software Limited (“Etrading Software”) and Expand Research LLP (“Expand”), FICWG aims to promote the global use of the FIX Protocol and other industry standards across all fixed income products. Since launch, FICWG has been working in collaboration with the FIX Protocol Ltd (FPL), to bring together market participants from across the trading community including trading venues, to create recommended best practices for the trading of IRS and CDS via the FIX Protocol, which are currently available in draft form for review and comment by FPL members.
The drafting of the best practice documentation is receiving input and support from the leading fixed income venues that are expected to become Swap Execution Facilities (SEFs), including BGC Partners, Bloomberg, Dealerweb, Eris Exchange, GFI Group, ICAP, ICE/Creditex, MarketAxess, Phoenix Partners, Tradition, Tradeweb and Tullett Prebon.
“We are delighted with this initiative and actively support the process. A market standard for FIX will contribute to improve the mechanical efficiency of electronic trading as well as increase overall market liquidity“. Francesco Cicero (GFI Group, Head of eTrading)
“MarketAxess supports the FICWG initiative to create standardized protocols for electronic derivatives trading. With the anticipated increase in e-trading volumes, driven by international regulation, we view standardization of trade messaging as a key component of efficient trade execution“. Nick Themelis (MarketAxess, CIO)
“The FICWG group initiative is a significant step in the right direction. Standardisation of protocols in the trading landscape helps to promulgate an orderly and fair market access and is another demonstration of the fast response of Trading venues and Market participants to the mandate of our regulators and the need of our industry “. Yann L’Huillier (Tradition, Group CIO)
Further revisions to the draft best practice documents are being released on a twice monthly basis. This high level of review and feedback ensures that the finalised version, which is expected in the next few months, will meet industry needs as comprehensively as possible. Additionally, FICWG will continue to work closely with FPL to identify any additional functionality needed to ensure FIX effectively meets the evolving business needs of the fixed-income markets and if required, enhancements will also be made available for industry adoption.
