FIX Protocol Ltd (FPL), the non-profit, industry-driven standards body at the heart of the global electronic trading community, today publishes a working document which illustrates how FIX could be used to more effectively support the needs of trading venues and other environments where high speed trading is of the essence.
This initiative, which now requires robust industry review followed by testing, before release, has the potential to enable market participants connecting to these venues to benefit from cost effective and efficient communications.
By significantly reducing the verbosity of the FIX messaging language, the new way in which FIX can be used, called 'Simple Binary Encoding' (SBE), offers an alternative to proprietary protocols in the high speed trading environment. It has been designed to work with the latest version of FIX, enabling market participants to benefit from the advanced support this offers for firms keen to use the standard to address the current business and regulatory challenges facing the industry.
The adoption of FIX by trading venues has risen significantly over recent years and it is hoped that this latest development will further support the upward trend. FIX offers market participants reduced integration costs and considerable efficiency gains by connecting firms to trading partners in a standardised and cost effective manner, minimising the financial implications of market entry and increasing choice as switching costs are reduced.
In addition to creating the Simple Binary Encoding, work has also been done to provide market participants currently using the two well-adopted industry standards for encoding, the Google Protocol Buffer and ASN standards, with guidelines that provide a framework demonstrating how FIX can be mapped to each encoding method.
FPL would like to invite trading venues, and other firms conducting high performance trading, to participate in the review phase of this initiative. The feedback received will prove fundamental in ensuring that the final released version meets the industry's demands as effectively as possible. If your firm would be interested in participating in the review phase, please email email@example.com.
Commenting on this announcement Hanno Klein, Co-Chair of the FPL Glolobal Technical Committee, SVP, Deutsche Börse, an FPL Premier Global Member, commented:
"For the benefit of all financial institutions, the FIX standard has long become the preferred language for the application level of market infrastructure. With the development of an open binary encoding standard, we can finally also address market requirements for high-performance trading interfaces. I am very pleased that we as Deutsche Börse could contribute our expertise and innovations skills in terms of low-latency interfaces. I am looking forward to seeing the draft of the new standard being tested as a joint effort by exchanges, software vendors and exchange users on its way to a final version ready for wide industry adoption."
Fred Malabre, Co-Chair of the FPL High Performance Working Group, Senior Director at CME Group, an FPL Premier Global Member, commented:
"I am very pleased with the FPL draft providing an encoding method and mapping for existing encoding methods, that can be used to encourage the development of standardised high performance interfaces for all layers of the latest version of the FIX standard.
CME Group is currently using the FIX Protocol for its trading interfaces - it gives us, and all of the trading community, a path forward towards very efficient yet flexible standard interfaces. I would like to personally thank all participants of the working group led by volunteers of financial institutions, users and software vendors for working together with their expertise to design the baseline needed for standard high performance interfaces, responding to current market needs."