The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Fidessa Embeds FIX in Post-Trade Workflow Easing Cost and Operational Risk

Fidessa has teamed up with FIX Protocol Limited (FPL) to offer a post-trade confirmation hub that allows buy- and sell-side firms to confirm trades via FIX. The company says the extension of order workflow directly into the middle office reduces operational risk through greater certainty in trading, less chance of errors and faster confirmation of trades.

Fidessa started talking to buy- and sell-side clients about the post-trade space a year ago. The imperative was to drive down costs and that meant looking at post-trade processes that had previously been perceived to be too difficult to change. Steve Grob, director of group strategy at Fidessa, says: “There are many proprietary processes for affirmation and confirmation, but it became evident that while these are important, none have a competitive edge and multiple processes make the task expensive.”

Considering financial firms’ huge investment in FIX infrastructure for order routing, Fidessa questioned how this could be leveraged for affirmation and confirmation, and turned to FPL to determine how FIX could be embedded in its post-trade workflow. David Pearson, a Fidessa executive and co-chair of the FPL EMEA Post-Trade Working Group, explains: “Our approach has been to focus on both the messaging standards that the industry wants to adopt and the business process for operational users. By standardising the workflow for our buy- and sell-side customers, we are able to provide a straight-forward and effective middle-office environment.”

The resulting Fidessa service covers global equities trading and is available immediately, with firms certifying once to the hub to become part of Fidessa’s global trading community. The service uses Fidessa’s existing post-trade workflow and its cost is a flat rate upgrade fee, rather than the per message payments favoured by other providers.

Grob describes operational efficiencies achieved by leveraging existing FIX investments as well as the benefits of increased certainty in trade confirmation, less room for error and a faster process. He says some contracts offered as the service was introduced have been signed and notes two early buy-side users of the FIX initiative as American Century Investments and Capital Group.

Scott Atwell, manager of FIX trading and connectivity at American Century Investments and a participant in the FIX standardisation effort, says: “We have asked all our brokers to support FIX for allocation and confirmation messaging, and many of our brokers use Fidessa’s post-trade solutions. We have worked closely with Fidessa, leveraging its open hub to implement FIX as a post-trade standard. The benefits in using FIX include efficiency gains, improved straight-through processing and quicker identification of issues, all of which provide significant risk reduction and cost savings.”

Grob hopes that with two large buy-side firms onside, others will follow bringing broker-dealers in their wake to complete affirmation and confirmation workflow. While the service is unlikely in itself to be a big earner for Fidessa, Grob says the company’s connectivity network is the fastest growing part of the business and that this, like other services, provides added value for customers.

Looking forward, he says the post-trade confirmation hub is the first in a series of initiatives by the firm aimed at simplifying post-trade workflow. He won’t be drawn on what is coming next, saying only: “We have stepped into the post-trade space with a FIX solution and are at base camp on what will be an exciting journey.”

Related content

WEBINAR

Recorded Webinar: Developing operational resilience

Financial institutions’ operational resilience – essentially the ability to prevent, adapt and respond to, and recover and learn from operational disruptions – has come under extreme pressure during the coronavirus pandemic, with last year’s March lockdown creating unprecedented circumstances for financial firms. Employees working from home raised the stakes, as they still do, adding to...

BLOG

Refinitiv Acquires GIACT to Boost Risk and Compliance Capabilities

Earlier this month, Refinitiv signed a definitive agreement to acquire Giact System (GIACT), a US-based specialist in digital identity, payments verification and fraud prevention, in order to boost its existing risk and compliance capabilities. RegTech Insight spoke to the key participants in the deal to learn more. The acquisition of GIACT comes at a time...

EVENT

Data Management Summit Virtual

The Data Management Summit Virtual will bring together the global data management community to share lessons learned, best practice guidance and latest innovations to emerge from the recent crisis. Join us online to hear from leading data practitioners and innovators from the UK, US and Europe who will share insights into how they are pushing the boundaries with data to deliver value with flexible but resilient data driven strategies.

GUIDE

RegTech Suppliers Guide 2020/2021

Welcome to the second edition of A-Team Group’s RegTech Suppliers Guide, an essential aid for financial institutions sourcing innovative solutions to improve their regulatory response, and a showcase for encumbent and new RegTech vendors with offerings designed to match market demand. Available free of charge and based on an industry-wide survey, the guide provides a...