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| Thought Paper |
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Enabling a seamless global trading mechanism with the FIX protocol |
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| Abstract |
The Financial Information eXchange (FIX) protocol is a public domain messaging
standard, which facilitates the real time electronic exchange of securities-related
information. The FIX protocol was originally developed for US domestic equity trading and
order executions between the principals. In less than a decade, FIX evolved into the de
facto equity trading communication protocol across the world that supports basic functions
such as pre-trade, trade and post-trade for equities and additional asset types such as
futures, options, fixed income and foreign exchange. FIX has helped reduce errors in
communication during the trading process. In addition, the settlement cycle period has
been reduced, leading to better efficiencies.
This Paper explains the significance of the FIX protocol in reducing the settlement cycle time and its evolution as a major component of electronic trading.
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