FIX Protocol Upgraded to Support MiFID II Time Stamps Requirements

The FIX Trading Community, the non-profit financial industry standards body behind the FIX Protocol, today announced that it will now support higher time-stamp resolution to enable market participants to become MiFID II compliant.

FIX explains that the Clock Synchronisation Working Group was formed in June 2015 to check the regulatory technical standard on Clock Synchronisation as defined by the European Securities and Markets Authority (ESMA) and the practicalities of implementation. Within these standards, there are requirements to communicate time-stamps of certain events with granularities of one microsecond. Those obligated to report with this level of granularity include Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term venues, banks and Buy-Side Buy-Side The buy-side is comprised of firms in the financial industry that purchase securities and are accompanied by account investment managers, pension funds, and hedge funds.The buy-side is composed of those that buy and invest large sums of securities with the intention of generating a lucrative return or have their funds managed. The Buy-Side ExplainedIn terms of Wall Street, the buy-side includes investment institutions that purchase securities, stocks, or other financial instruments with the aim The buy-side is comprised of firms in the financial industry that purchase securities and are accompanied by account investment managers, pension funds, and hedge funds.The buy-side is composed of those that buy and invest large sums of securities with the intention of generating a lucrative return or have their funds managed. The Buy-Side ExplainedIn terms of Wall Street, the buy-side includes investment institutions that purchase securities, stocks, or other financial instruments with the aim Read this Term customers. The group is comprised of these different market participants as well as vendors who are proactively looking at MiFID II to address these issues and provide tangible guidelines for becoming compliant.

Neil Horlock, Director of Global Market Connectivity, Credit Suisse and Co-Chair of the Clock Synchronisation Working Group, noted, “By proactively making this adjustment, we are giving clear guidance to the industry on how to use FIX for MiFID II compliant time stamps. We also hope to protect the integrity of the standard while ensuring that all FIX encodings - past and present - are suitable not only for the MiFID II legislation but any likely future requirements for high-precision time stamps.”

The encodings in the different versions of the FIX Protocol currently support millisecond granularity. The enhancement to support microseconds will be backwardly compatible and is relevant to all supported versions of FIX. Although the current business requirements speak about ‘microseconds’, there is a strong recommendation to enhance the standards to remove any limitation of time stamp granularities.

Kathleen Traynor, Consultant to Cinnober Financial Technology AB and Co-Chair of the Clock Synchronisation Working Group, commented: “MiFID II implementation involves many IT challenges for industry participants. FIX’s Clock Synchronisation Working Group brings people together to share ideas and find efficient ways of achieving compliance, which is vital given all the heavy lifting we have ahead.”