Financial Information eXchange (FIX) is the main standard for electronic pre-trade and trade communications worldwide. Increasingly, financial institutions are moving away from the inefficiencies of phone and fax communication with counterparties and implementing order management systems (OMS) and connectivity solutions that take advantage of the automation potential of the FIX protocol for securities messaging.
But there is still a gap in FIX adoption between sell side institutions – which have largely embraced FIX to improve cost efficiencies – and buy side firms. For many, the cost of implementing FIX has been an obstacle to achieving the benefits of automation and straight-through processing (STP).
These benefits are increasing in scope as more product types and trading options are covered by the latest versions of FIX, and as the protocol converges with SWIFT, which dominates post-trade settlement messaging.
But before a critical mass of market participants abandon phone and fax in favour of FIX automation, cost-effective FIX solutions that can demonstrate rapid return on investment are needed for those institutions that fall outside the tier one category.
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