FIX Trading Adds FX Support on Its Trading Enablement Standard Initiative

The FIX Trading Community, which develops and manages the FIX messaging standard, announced today that the Trading Enablement Standard Initiative (TESI) now supports FX client enabling. Launched in January 2013, TESI is a an open standard messaging system that was created using the FIX protocol to enable connection of dealers and their clients. Initially supported last year was a standardization for the Fixed Income market, which enabled messaging between dealers and clients using internal and external trading platforms.

After enabling Fixed Income, FX support is being announced today. The extension of TESI open standards for FX is being enabled on trading platforms for trading of FX spot, forwards, Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term, options, NDFs and precious metals. According to the FIX Trading Community, the extension of the standard was based on “collaboration with the FX community."

Commenting on the news on FIX Trading Community’s public statement, Sassan Danesh, Co-Chair FIX Trading Community OTC Products Committee, Managing Partner, Etrading Software said, “The extension of this initiative to FX is an important step towards Multi-Asset Multi-Asset Composed of varying asset classes, multi-asset is a blanket designation combining different classes such bonds, equities, cash equivalents, fixed income, and alternative investments.When compared to traditional balanced funds, multi-asset solutions differ because they target specific investment outcomes. This includes outcomes such as return above inflation as opposed to gauging performance against standardized benchmarks.Given the composition of multi-asset classes, they need to be dynamically Composed of varying asset classes, multi-asset is a blanket designation combining different classes such bonds, equities, cash equivalents, fixed income, and alternative investments.When compared to traditional balanced funds, multi-asset solutions differ because they target specific investment outcomes. This includes outcomes such as return above inflation as opposed to gauging performance against standardized benchmarks.Given the composition of multi-asset classes, they need to be dynamically Read this Term class ‘Straight Through Enablement’ that will allow dealers to manage a previously manual process electronically using the FIX Protocol. Further work is being undertaken to ensure a smooth adoption by the industry.”

The addition of TESI support occurs as market share of electronic trading of FX continues to increase. This in turn has led to standardized messaging protocol requirements, as the fractured FX market, which includes primary dealers, regional banks and traders, that in the past may not have been connected to one another, are quickly becoming intertwined on joint platforms. According to the FIX Trading Community, by being supported by TESI, it will allow FX participants the ability to “change pricing streams, map accounts, authorise new instruments or even suspend clients for trading and a message will be automatically distributed to all relevant parties using a standard protocol.”

Speaking about the simplified approach that the TESI support can bring to the FX market, Neill Penney, Workflow Management Proposition Manager, Thomson Reuters, also noted in the public statement, “All of us in the FX industry share a common goal: simplifying FX trading, reducing costs, and streamlining processes. This benefits all of our customers - be they corporations, pension funds, asset managers, banks or governments - and reduces the impact of FX transaction costs on end users. Thomson Reuters is committed to that common goal, which is why we support this initiative.”