Dodd Frank/SEFs may drive FIX adoption as electronic trading protocol for Fixed Income


Major sell side firms see the potential for the FIX protocol to become the electronic trading standard for emerging swap execution facilities (SEFs) in the OTC derivatives market, according to Courtney Doyle McGuinn, FPL Operations Director, who spoke with Wall street & Technology at the SIFMA event in New York yesterday.

However, the usage of FIX in fixed income markets is still lagging even though the tags for fixed income have been available in FIX since the 2002/2003 time frame, partly because assets managers call up their brokers to execute a trade.

However, momentum for adopting FIX for fixed-income is building as a result of the Dodd-Frank financial reforms which is seeking greater market transparency by requiring most types of OTC derivatives to clear through central counterparty facilities and trade on swaps execution facilities or SEFs. A surge in new market trading venues is expected within the U.S. and similar reforms are expected from upcoming MiFID II regulations in Europe.

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