A Quick FIX: Fidessa Launches Post-Trade Confirmation Hub

Monday, 05/08/2013 | 08:25 GMT by Andrew Saks McLeod
  • Fidessa Group has announced the availability of its post-trade confirmation service, launched under the designation Confirmation Hub, with which buy-side and sell-side firms can confirm trades via FIX.
A Quick FIX: Fidessa Launches Post-Trade Confirmation Hub

Since FIX Protocol began expanding its service into the post-trade arena in January this year, trade processing firms have been working on the development of appropriate solutions.

The most recent example of this is Fidessa Group, which on Friday began to offer the availablility of its Post-trade Confirmation Hub which allows buy-side and sell-side firms to confirm trades between themselves via Financial Information Exchange (FIX).

Industry Guidelines Set

Back in January this year, FIX Protocol Ltd (FPL) explained to Forex Magnates that it actually wasn’t a post-trade service that FIX Protocol developed but a set of industry guidelines to encourage the adoption of FIX for post-trade processing between buy-sides and sell-sides that can be used bi-laterally as well as through intermediary facilities. As a result, a number of members of the FPL community are developing post-trade services and leveraging the best practices that have been developed.

Fidessa's new service will enable firms to send and receive allocation and confirmation instructions to each other via an open, free-to-use protocol. This is intended to remove the need for proprietary alternatives that charge on a per message basis. The service covers global equities trading and is available with immediate effect.

In the developmental stages, Fidessa worked alongside FPL to determine how an open and free standard like FIX could be embedded within its post-trade workflow. Fidessa's David Pearson, who is Co-chair of the FPL EMEA Post-trade Working Group, made a statement on behalf of the collaborative group: "Our approach has been to focus on both the messaging standards that the industry wants to adopt and the business process for the operational users. By standardizing the workflow for all our buy- and sell-side customers we are able to provide a straight-forward and effective middle office environment. In addition, firms can Leverage the existing FIX infrastructure they already have in place for routing order flow."

During the developmental stages of FPL entering the post-trade area, major brokers and buy-sides worked together to implement the guidelines and a series of vendors worked toward building post-trade services.

17f0628

Steve Grob,
Director of Group Strategy,
Fidessa Group

There are of course some old-stagers in this field, Traiana being a veteran with 13 years of post-trade processing behind it. The company now provides its Harmony product which is a cross-institution network that connects PBs, EBs and buy-side clients. The effect of the introduction of this network was that it not only provided users with post-trade monitoring services beyond their own walls, but expanded the messaging capabilities to counterparties.

This provided Harmony members with the ability to have a single connection to a messaging hub which ensured that trades could be submitted in the sender’s preferred format and delivered to each recipient in their preferred setup. Just last week, the company delivered its first NDF trade via its new central counterparty system, Harmony CCP Connect.

The functionality of this particular system encompasses CCP connectivity, trade routing, affirmation, matching, allocation, and reporting for centrally cleared OTC FX options and non-deliverable forwards (NDFs).

Simplification Of Post-Trade Processing

Fidessa’s new system concentrates going some way toward tackling the fragmentation within the marketplace: "For some time the industry has been looking at post-trade as a key battleground in the war on daily operating costs," stated Steve Grob, Director of Group Strategy at Fidessa.

"What we found was that, whilst many of the processes are hugely important, there is no competitive edge in one proprietary approach over any other. Recent fragmentation into competing alternatives has simply made the whole process even more inefficient for market participants of all types" concluded Mr. Grob.

Scott Atwell, Manager of FIX Trading and Connectivity at American Century Investments and key participant in the FIX standardization effort, stated on the launch: "We have asked all of our brokers to support FIX for allocation and confirmation messaging, and many of our brokers use Fidessa’s post-trade solutions.”

“We have been working closely with Fidessa, leveraging their 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" explained Mr. Atwell.

Mr. Grob, keen to express the importance of simplification, concluded: “Fidessa's Post-trade Confirmation Hub is the first in a series of initiatives by the firm aimed at simplifying post-trade workflow. "We have always focused on removing unnecessary complexity in our industry"

"Until now these efforts have been largely focused in the front office, but we're now bringing the same intelligent workflow into new areas such as post-trade."

Since FIX Protocol began expanding its service into the post-trade arena in January this year, trade processing firms have been working on the development of appropriate solutions.

The most recent example of this is Fidessa Group, which on Friday began to offer the availablility of its Post-trade Confirmation Hub which allows buy-side and sell-side firms to confirm trades between themselves via Financial Information Exchange (FIX).

Industry Guidelines Set

Back in January this year, FIX Protocol Ltd (FPL) explained to Forex Magnates that it actually wasn’t a post-trade service that FIX Protocol developed but a set of industry guidelines to encourage the adoption of FIX for post-trade processing between buy-sides and sell-sides that can be used bi-laterally as well as through intermediary facilities. As a result, a number of members of the FPL community are developing post-trade services and leveraging the best practices that have been developed.

Fidessa's new service will enable firms to send and receive allocation and confirmation instructions to each other via an open, free-to-use protocol. This is intended to remove the need for proprietary alternatives that charge on a per message basis. The service covers global equities trading and is available with immediate effect.

In the developmental stages, Fidessa worked alongside FPL to determine how an open and free standard like FIX could be embedded within its post-trade workflow. Fidessa's David Pearson, who is Co-chair of the FPL EMEA Post-trade Working Group, made a statement on behalf of the collaborative group: "Our approach has been to focus on both the messaging standards that the industry wants to adopt and the business process for the operational users. By standardizing the workflow for all our buy- and sell-side customers we are able to provide a straight-forward and effective middle office environment. In addition, firms can Leverage the existing FIX infrastructure they already have in place for routing order flow."

During the developmental stages of FPL entering the post-trade area, major brokers and buy-sides worked together to implement the guidelines and a series of vendors worked toward building post-trade services.

17f0628

Steve Grob,
Director of Group Strategy,
Fidessa Group

There are of course some old-stagers in this field, Traiana being a veteran with 13 years of post-trade processing behind it. The company now provides its Harmony product which is a cross-institution network that connects PBs, EBs and buy-side clients. The effect of the introduction of this network was that it not only provided users with post-trade monitoring services beyond their own walls, but expanded the messaging capabilities to counterparties.

This provided Harmony members with the ability to have a single connection to a messaging hub which ensured that trades could be submitted in the sender’s preferred format and delivered to each recipient in their preferred setup. Just last week, the company delivered its first NDF trade via its new central counterparty system, Harmony CCP Connect.

The functionality of this particular system encompasses CCP connectivity, trade routing, affirmation, matching, allocation, and reporting for centrally cleared OTC FX options and non-deliverable forwards (NDFs).

Simplification Of Post-Trade Processing

Fidessa’s new system concentrates going some way toward tackling the fragmentation within the marketplace: "For some time the industry has been looking at post-trade as a key battleground in the war on daily operating costs," stated Steve Grob, Director of Group Strategy at Fidessa.

"What we found was that, whilst many of the processes are hugely important, there is no competitive edge in one proprietary approach over any other. Recent fragmentation into competing alternatives has simply made the whole process even more inefficient for market participants of all types" concluded Mr. Grob.

Scott Atwell, Manager of FIX Trading and Connectivity at American Century Investments and key participant in the FIX standardization effort, stated on the launch: "We have asked all of our brokers to support FIX for allocation and confirmation messaging, and many of our brokers use Fidessa’s post-trade solutions.”

“We have been working closely with Fidessa, leveraging their 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" explained Mr. Atwell.

Mr. Grob, keen to express the importance of simplification, concluded: “Fidessa's Post-trade Confirmation Hub is the first in a series of initiatives by the firm aimed at simplifying post-trade workflow. "We have always focused on removing unnecessary complexity in our industry"

"Until now these efforts have been largely focused in the front office, but we're now bringing the same intelligent workflow into new areas such as post-trade."

About the Author: Andrew Saks McLeod
Andrew Saks McLeod
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