FIX has become the major messaging protocol in global financial markets and has arguably been the single most influential technical development in financial markets in the last twenty years. To a large degree it has long met its original objectives but there is still much that can be achieved so the future of FIX perhaps needs to be redefined.
Just this week FPL announced the details of standards for a consolidated tape that could be a watershed moment for the securities industry and a prime example of how important FIX and FPL is to the industry and how very important it is to the future.
Like any company that achieves such great success and reaches its goals, a process of revaluation is necessary. As I have said quite a few times recently, we live in a rapidly changing world and the future landscape has yet to be mapped out, so for organisations like FIX their challenge has to be to keep checking their objectives and if necessary change them. Organisations that fail to objectively review their position and relevance can quickly fall out of importance, or worse become a burden. A bit like an unwelcome guest at a party not recognising that it is time to go.
What then is the future for FIX? I am certain that this question has been asked over and over again at FPL Board meetings and in due course we will understand the direction of FIX and what direction it will be going. However, it’s worth putting FIX under the microscope and examining its possible future.
For me, the future has to include expanding the use of the protocol across all asset classes in all financial markets. So although much has been accomplished in this respect I think this is an on-going mission.
There must be some thought given to the role of FPL in the markets itself. This should include deepening the organisation and its influence within political and regulatory platforms. This will cost and a review of the financial structure of FPL is long overdue. Quite correctly, the origins of FIX lay in organic growth and as a not for profit organisation, to be effective in the user funds it generates. However, the future should include a revised financing structure that not only represents the true value to its users, but provides additional revenue to expand the protocol by moving it into other related operational areas.
In today’s markets asking for more funds will not be popular but a far sighted approach is needed to project the future of FIX and gain increasing rewards of cost and risk reduction through communication efficiency.
A formal training and examination programme that can be a stepping stone for an employee’s career would also enhance the overall understanding of FIX and increase its value to firms and the finance industry as a whole.
Personally I would like to see FIX move into the Cloud and for access to be opened up to the retail markets. For FIX to open up more opportunities there needs to be a great deal more research and development within the organisation and not rely so much on part time work from member firms. Again this means more funding. It’s my recommendation that FPL engages with their members and question their future agenda and position in the market.