FIX Protocol Limited (FPL) says it has terminated an agreement it entered into with Swift to establish the ISO 15022 XML format as a common messaging standard for securities processing and will focus on driving use of its own FIX Protocol instead.
FPL and Swift originally signed a Memorandum of Understanding (MoU) in July 2001 to explore the possible convergence of their respective messaging protocols by focusing on the development and adoption of ISO 20022 XML as a common industry standard. This would enable the flow of data between the front and back office operations of securities institutions.
But FPL describes the set of messages crafted under this scheme as "redundant". The standards body argues that the adoption of FIX in the pre-trade and trade space has grown significantly since the MoU was signed. As a consequence, it no longer believes that the ISO 20022 Securities Pre-Trade and Trade work, even when ratified, will be widely adopted by the asset management and brokerage communities.
In a statement, the group says: "It is important for the FIX community and the financial industry that clarity and certainty be provided to those FIX users who have invested significantly in the FIX Protocol.
"FIX is the de facto industry standard for pre-trade and trade, and is gaining rapid adoption for post-trade communication, particularly for listed derivatives. As such, FPL believes that the FIX Protocol should serve as the basis for future international standardisation."
James Donovan, head of securities industry division Swift says the co-operative is "disappointed" that FPL is no longer prepared to work toward more interoperability through the ISO 20022 approach, and re-confirmed Swift's commitment to the standard.
"Swift is working with numerous industry groups and standards bodies to ensure end-to-end interoperability as this will result in reduced cost and complexity for the entire industry," he says. "We believe that the ISO 20022 standard provides an ideal platform to achieve this. The candidate pre-trade and trade messages, jointly submitted by Swift and FPL, are a good example of bridging the front and back offices, since they will use the same message components as the rest of the transaction."