By John Sandman
Standards organizations FIX Protocol Ltd. (FPL) and the financial information services division (FISD) of the Software & Information Industry Association have agreed to work together on setting best practices for reference and market data.
FPL oversees the financial information exchange, or FIX, protocol, which is the global standard for buy-side-to-sell-side communications in the equities markets and is increasingly used in fixed-income, listed derivatives and foreign exchange transactions. In 2001, FISD introduced the market data definition language (MDDL), which allows trading venues, vendors and firms to exchange pricing, descriptive and reference data.
Bill Nichols, FISDs program director for securities automation processing, said that the organizations will collaborate on several initiatives. As the distinctions between market and reference data become increasingly arbitrary, he said, FISD and FPL are uniquely positioned to provide our members with a venue within which to cover all aspects of the landscape, from legal issues to down-and-dirty technical details.
Under the agreement, announced April 17, FPL will contribute to the FISD data model working group. The group, which first met in February, plans to consolidate and extend existing models into a new framework. Last month, Nichols told Securities Industry News that the group wants to ensure that its new model is mapped to FIX. Trading systems, which rely on FIX formats, need to link to market data systems, so MDDL and FIX formats must talk to one another, he said.
Issues that the data model group, which includes representatives from Interactive Data Corp., JP Morgan Chase & Co. and Fidelity Investments, is addressing include inconsistent reconciliation of business and technical practices across integrated platforms and the relationship between streaming trade data and reference data stored in multiple relational databases.
You want to take your streaming trade data from FIX and bounce it into your reference data store, which is the generic architecture providing a framework for how this works for the industry, said Nichols. Databases typically move a lot more slowly than messages. The push is to get real-time positions and real-time risk assessments. At any given moment you need a combination of reference and market data to understand where you are and what youre doing.
According to Jim Northey, co-chair of the FPL Americas regional committee, the agreement between FPL and FISD comes in part because the European Central Bank is making a major push for improved end-to-end processing, including reference data across asset classes, counterparty reference data, account management, clearing and settlement.
Noting that the groups have had a strong relationship over the years, Northey, who is also founder and principal of Chicago-based consultancy LaSalle Technology Group, said that we are helping FISD extend their model into the OTC derivatives space. He added that FPL is hoping for involvement from FpML.org, overseer of the financial products markup language, which covers over-the-counter derivatives transactions.
FPL has had a long, and at times contentious, relationship with interbank messaging cooperative Swift, which is the registration authority for the International Organization for Standardization (ISO) 15022 and 20022 messaging formats. Last year, the organizations, along with FpML.org--part of the International Swaps & Derivatives Association--and the International Securities Association for Institutional Trade Communication introduced a standards road map that calls for increased cooperation among the bodies.
Northey said that ISO 20022 is being revised to include MDDL 3.0, which rolled out in February 2008.
This article can also be found at SecuritiesIndustry.com.
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