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FIX Plans Broader Asset Class Coverage and Move into Back-Office Trade Settlement

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FIX is extending its reach with plans to broaden asset class coverage and introduce the FIX messaging protocol into back-office settlement workflows between both asset managers and custodians, and brokers and custodians. These developments are being overseen by the Global Post-Trade Working Group within the FIX Trading Community and are designed to standardise workflows and allow firms already invested in FIX to extend its use.

To find out more about the working group’s plans, we caught up with David Pearson, co-chair of the working group and head of post trade at Fidessa. He outlines the working group’s early years of helping firms across Europe, the US and Asia-Pacific implement the FIX standard in equities trade flows, and says: “If we can do that successfully for allocation and confirmation in equities, we can move on to other asset classes.”

Initial plans involved extending FIX to cleared derivatives, bilateral products and money markets instruments. The working group, which includes both buy-side and sell-side representatives, is now looking at foreign exchange (FX) and hopes to have guidelines in place for standard confirmations processing in the first quarter of 2019.

Pearson says OTC derivatives and swaps are not yet on the agenda, but notes that there is a willingness in the working party to keep going and bring OTC products into the fold next.

The working party’s plan for the back-office considers how to use FIX to communicate between brokers, asset managers and custodians. With FIX in the front-office and middle-office, Pearson questions why firms would want to use other messaging protocols, perhaps Swift, for back-office communications. With this in mind, and with firms increasingly interested in information flow both to and from custodians to check progress on trade settlement and get alerts to any problems quickly, the working group has established a task force to work on FIX for the back-office.

Pearson concludes: “If firms have invested in FIX as a core technology in front-office and middle-office workflows, extending the protocol into post-trade workflows is a natural progression and provides the efficiencies of using a single FIX standard.”

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