The Financial Information Exchange (FIX) protocol began life in the early 1990s as an attempt to streamline financial transaction messaging between Salomon Brothers and Fidelity. It has since grown into the industry standard for transaction messaging between sell-side and buy-side practitioners worldwide, and is being adopted by exchanges and other execution venues as the messaging protocol for trading participants.

In short, FIX is the financial markets’ greatest standards success. And more, it seems, is to come.

Having grown for its simple transaction detail roots, FIX has been applied to many financial markets work flows. Most recently it has been co-opted by players in the algorithmic trading and latency measurement segments, and appears set to establish itself as a standard in those areas.

Indeed, FIX is so ubiquitous that some view it as a commodity, with little opportunity for adding value.

But that’s not the case. Partly due to its iterative, almost ‘open source’ development process, FIX comes in many iterations, which gives applications developers an opportunity to exploit their expertise in working with the protocol.

In this report, we ask industry experts about their experience of using the FIX protocol, and ask them to discuss the benefits it has brought to the electronic trading community. From their remarks, it’s clear that FIX has contributed to an environment in which the physical act of trading has been streamlined, opening up further opportunities for profit.

Of course, with these opportunities come challenges, and our FIX practitioners have outlined major obstacles to success and offered some useful advice on how best to deal with them. They also identify key areas of success for FIX and give some suggestions on where else within the financial markets work flow the protocol is likely – and best suited – to be deployed.

What’s clear is that FIX has been an overwhelming success, a rarity among technology standards for the financial markets. Practitioners have overcome the fear of losing competitive edge that burdens many standards initiatives, and have brought to bear a community-based approach that offers benefits at all levels. And that’s no mean feat.

Contributors:

  FIX Community (782.3 KiB)
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