FIX Trading Community, the non-profit, industry-driven standards body at the heart of the global electronic trading community, announces the adoption of the FIX Protocol by an overwhelming majority of Swap Execution Facilities (SEFs), including BGC Derivative Markets, L.P., Bloomberg, trueEX, GFI Group, ICE Swap Trade, MarketAxess, Tradeweb (TW and DW), Tradition Trad-X and Tullett Prebon.
The FIX Trading Community has been working closely with the investment community since 2011 to develop guidelines on how FIX could be used to trade swaps following the requirement by Dodd-Frank a year earlier for regulated trading of certain swap instruments. With the commencement of mandatory trading for selected swap instruments this year, this work has resulted in the establishment of FIX as the de-facto standard for swaps trading on SEFs.
The adoption of FIX has brought multiple benefits to the industry:
1. Increased pre-trade transparency through faster and easier integration between market participants
2. Increased execution efficiency through lower cost of trading and connectivity
3. Additional benefits include the ability of the industry to deploy cross-asset trading platforms for the trading of swaps
Those involved have commented on the efficiency and success so far:
Sassan Danesh, Co-Chair FIX Trading Community Global Fixed Income Subcommittee, and Managing Partner of Etrading Software said: “The work of the FIX Trading Community, in partnership with market participants over the last 3 years, has shown the value of the collaborative ethos and has proved to be invaluable in accelerating the uptake of electronic trading in OTC derivatives.”
Justin Peterson, Managing Director and Head of Institutional Technology at Tradeweb, said: “Tradeweb supports FIX for our fixed income and derivatives marketplaces in the US, Europe and Asia because there are tangible benefits to our clients. As electronic swaps trading continues to develop and evolve, we can add new functionalities or new types of instruments for our clients quickly and efficiently using the FIX Protocol.”
Daniel Marcus, Global Head of Strategy and Business Development, Tradition said: “Trad-X was designed by the market for the market to create a location with the best executable global interest rate derivative liquidity available. One of the key requirements was ease of access and adoption of the FIX Protocol helped us to satisfy this. More specifically utilising the global standard for electronic trading enabled market participants to take advantage of increased efficiencies by reducing duplicative time, effort and cost.”
Paul Mullen, Head of Credit Technology at Barclays, said: “In an increasingly electronic world, and with multiple new SEFs coming online, fragmentation presents both a liquidity and technology-cost challenge for the industry. Barclays supports standards such as FIX that help to ensure that the potential disruption is kept to a minimum.”
Maged Hassan, Global Head of Fixed Income e-Trading Technology at Morgan Stanley, said: “Morgan Stanley is a large supporter of standardization across OTC derivatives industry, and FID e-Trading as a whole. The FIX Trading Community commitment to achieve this standard drives transparency across venues as well as provides sizable savings across the market participants. We look forward to wide market adoption across all Swap Execution Facilities (SEFs).”
Looking forward, with the extension of swaps electronic trading across the globe, the FIX Trading Community is looking to extend support of the protocol to trading platforms in Europe for Mifid II as well as to cater for regulatory requirements in Asia.
