The FIX Trading Community, the financial trading industry’s standards body, has today announced that the industry has begun implementation of the guidelines set down by the FIX Trading Community to reduce operational risk and enable more efficient set up of clients on Over-The-Counter (OTC) electronic trading platforms.
The Trading Enablement Standardisation Initiative (TESI), launched in January 2013, has been working with a number of platforms to promote automation and standardization of important client information such as enabling a new buy-side trader, setting a risk profile and enabling new products for an existing buy-side trader.
In an exclusive interview in December, Sassan Danesh, Co-Chair FIX Trading Community Global Fixed Income Committee, spoke about the initiative and correctly predicted that TESI will be ratified by the FIX trading community during Q1 2014. In the interview he also explained what is meant by trading enablement and the benefits and importance of it to OTC trading.
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Mr. Danesh, who is also a Managing Partner at Etrading Software, noted in today’s announcement: “Historically, the management of trading relationships across OTC markets has been an error-prone, manual process. The Straight Through Enablement capability provided by FIX allows industry adopters to provide superior client service and reduced operational risk by ensuring the dissemination of consistent counterparty information between market participants.”
The aim of using the FIX messaging language to transmit this information is that all parties involved will have assurance that they are using the same protocol. The FIX protocol is already used by thousands of firms to communicate their trades and is the most commonly used messaging protocol by FX brokers.
Justin Peterson, a Managing Director at Tradeweb, commented in the announcement: “TESI allows for the standardisation of client enablements on electronic platforms, thereby making that process faster and more efficient. We worked closely with FIX Trading Community to develop the initiative, and are implementing it because of the benefits it brings to our clients in the global fixed income trading industry, and in the derivatives markets in Europe and Asia.”
Commenting today to Forex Magnates about the importance of this new development for the FX industry, Mr. Danesh said: “The benefits provided by the TESI protocol are equally applicable to the FX markets, and indeed the FIX Trading Community members, consisting of the major FX broker-dealers and FX ECNs worked together to complete the global specifications for the use of TESI within the FX space at the end of 2013. The current focus of the initiative is on achieving widespread adoption within the community, starting in fixed income, and extending to FX in the coming months.”