Mostly… fixed income and cross product eTrading

August 22, 2006

FIX for fixed income order flow ; buyside

Filed under: etrading, FIX, OMS / EMS — holky @ 3:17 pm

FIX will become the de-facto protocol for fixed income order routing from a buyside perspective. But it is going to take a while so don’t hold your breath…..This year we’re seeing many more buyside firms implementing fixed income order management systems (OMS). But even with their own desktop (the OMS) from which they conduct proprietary value-add alpha-seeking decision making, it is still incredibly rare for customers to acknowledge a desire to imminently aggregate their participation in the electronic fixed income markets into this desktop. OMS are being put in place primarily for compliance benefits.With typical maximum integration between buyside systems and the etrading platforms currently to upload/download orders and trades via a spreadsheet, the platforms’ existing buyside FIX connectivity offering is clearly very little used at this point. But the FIX connection is there as and when the appetite to connect from OMS arrives. And in terms of bang-for-buck, customers clearly will connect to these platforms first – a conceptually simple change to existing workflow so you can “press a button to release the orders” to market rather than upload/download via spreadsheet.After that, with dealers offering that customer direct connectivity by way of a service enhancement/cost reduction exercise, we see a landscape similar to the equity world now – where individual customers connect to a few chosen dealers direct, and via market intermediaries (i.e. the platforms, above) to reach other pools of liquidity. This builds on the pipes and connections already in place from the OMS. These use FIX.

So with the players coming onto the pitch in the form of the OMS being deployed in buyside, and the OMS vendors often being FPL members .. and the platforms already “offering” a FIX interface for buyside to connect for their order flow, it is surely an open goal for FIX to become the de-facto standard in this space .. in which case it’s just a matter of time…..


1 Comment »

  1. […] of buyside will in the forseeable future be integrating liquidity venues into their own desktop (no real surprise, eh, other than it’s taken quite so long to get […]

    Pingback by MarketAxess still 0, Tradeweb 1? « Mostly… — November 30, 2007 @ 9:40 am

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