Initiative led by 13 investment banks has gathered the support of the principle fixed income trading venues expected to register as SEFs under the Dodd-Frank legislation
The Fixed Income Connectivity Working Group of leading sell side banks (FICWG) welcomes the overwhelmingly positive response shown by the industry for the promotion of open, standardized protocols for the trading of Interest Rate Swaps (IRS) and Credit Default Swaps (CDS).
Launched by the global investment banking community in June 2011 and supported by Etrading Software Limited (“Etrading Software”) and Expand Research LLP (“Expand”), FICWG aims to promote the global use of the FIX Protocol and other industry standards across all fixed income products. Since launch, FICWG has been working in collaboration with the FIX Protocol Ltd (FPL), to bring together market participants from across the trading community including trading venues, to create recommended best practices for the trading of IRS and CDS via the FIX Protocol, which are currently available in draft form for review and comment by FPL members.
The drafting of the best practice documentation is receiving input and support from the leading fixed income venues that are expected to become Swap Execution Facilities (SEFs), including BGC Partners, Bloomberg, Dealerweb, Eris Exchange, GFI Group, ICAP, ICE/Creditex, MarketAxess, Phoenix Partners, Tradition, Tradeweb and Tullett Prebon.
“The extension of FIX standardization to CDS and IRS is a welcome and constructive industry led initiative which will simplify execution streams and allow venues such as BGC to make transaction chains more transparent to regulatory bodies“. Philip Norton (BGC Partners, Executive Managing Director and Global Head of e-Commerce)
“Recent US financial regulation is spurring unprecedented innovation among fixed income trading platforms, and the FICWG’s forward-thinking efforts to drive consensus on an open trading specification allows innovative venues like Eris Exchange to achieve widespread, efficient distribution among sell-side institutions critical to the success of fixed income markets“. Michael Riddle (Eris Exchange, COO)
“We are very pleased to see the swaps market adopt the FIX Protocol for API-based trade execution. The launch of FICWG by leading sell-side banks shows the strong commitment to the FIX Protocol and the advantages of API trading“. Pat DeFrancesco (Intercontinental Exchange, Vice President, Credit Technology)
Further revisions to the draft best practice documents are being released on a twice monthly basis. This high level of review and feedback ensures that the finalised version, which is expected in the next few months, will meet industry needs as comprehensively as possible. Additionally, FICWG will continue to work closely with FPL to identify any additional functionality needed to ensure FIX effectively meets the evolving business needs of the fixed-income markets and if required, enhancements will also be made available for industry adoption.
About the FICWG members:
- The members are a group of global broker-dealers who are committed to the promotion of open standards for the trading of fixed income products. They collectively represent a large proportion of the global fixed income OTC market and are named in the June FICWG public announcement.