FIX Protocol Ltd. (FPL) launched Buy-Side Working Groups in the Americas, EMEA and Asia Pacific regions in order to provide a platform for buy-side representatives to discuss how their needs can be efficiently met by the automated trading community.
A primary area of focus for these groups has been to seek a more consistent response from the broker-dealer community with regards to broker reporting of the execution venue on each fill. As a result, they have sought to standardize and expand the information received in trade reports from brokers by creating a best practices document to help resolve these challenges. The buy-side participants would like to encourage the sell-side community at large to implement these guidelines after consulting with their clients on the readiness of their systems.
Although some of the information being requested is not new and brokers have been supplying this data in their trade reports for some time, the type, amount and how information is sent from distinct brokers to the buy-side varies. Therefore, the information that is being requested as part of the guidelines will enable the buy-side traders to:
o Increase awareness of where their orders are being filled as the market continues to fragment into dozens of dark and lit trading venues.
o Better understand if the venues receiving their orders are the most desirable.
o Enable money managers to determine whether or not the routing decisions of the brokers were made to the benefit of the broker or the client.
"These guidelines were developed based on the input and experiences of several buy-side firms. It is the expectation of the group that this will result in consistent information regarding the manner in which orders are executed in an increasingly fragmented marketplace," said Bill Rosner, Application Development Manager, The Capital Group Companies, Inc and Co-Chair of the FPL Buy-side Execution Venue Working Group.
It is important to note that this initiative is not focused on any major changes to the FIX Protocol specification itself but the establishment of a set of best practices with a goal to lead to greater consistency and standardization among broker practices. The link to the the guidelines can be found here: fixprotocol.org/documents/5581/BuySideExecutionVenueAnnouncement.pdf.