IIROC and FIX Protocol

By Eric Whaley

The Investment Industry Regulatory Organization of Canada (IIROC) will adopt a FIX-based protocol as the standard regulatory feed specification for all equity exchanges and marketplaces operating in Canada. IIROC regulates Canada’s investment dealers and all equity and debt marketplaces in the country. The organization was formed in 2008 through the merger of the Investment Dealers Association of Canada and Market Regulation Services Inc. IIROC’s adoption of FIX means IIROC joins a global list of institutions that already leverage FIX for their electronic exchange of information.

IIROC has selected FIX for all its regulatory data feeds to ensure that the protocol it mandates for Canadian regulatory market data is in-line with global practices and is a cost-effective and flexible standard that can be adopted by market participants.

The adoption of FIX for all regulatory market data feeds is a necessary part of IIROC’s Surveillance Technology Enhancement Platform, or “STEP”, initiative. Launched in 2008, STEP is the implementation of a new cross-market surveillance platform to monitor trading on all equity marketplaces and exchanges operating in Canada. IIROC’s STEP program’s key objective reflects the complex realities of today’s trading environment. Once implemented, the program will provide an efficient, cost-effective system for realtime market surveillance across multiple marketplaces. As the markets continue evolving, the platform will allow for flexibility and speed-to-market enhancements in response to shifting market structures and trading volumes. IIROC expects full implementation of the STEP platform in Q1 2010.

IIROC’s standardization of the regulatory feed in the FIX format includes nearly six months of consultation with FPL. The two organizations worked together to design a FIX standard specification that would meet IIROC’s need for timely and accurate trade information from the equity marketplaces it monitors.

The collaboration between IIROC and FPL became a successful partnership. Together the two organizations conducted a gap analysis to identify current data needs and reviewed data specifications to determine how the FIX Protocol could best be leveraged. IIROC concluded that the FIX message standard provided the most costeffective and flexible solution for trading data in a multi-market environment.

Since FIX is an open standard used around the world, this will also contribute to keeping Canada’s capital markets efficient and competitive by allowing existing exchanges and future entrants to interface with a standard industry messaging protocol.

For regulators such as IIROC, rapidly changing market conditions present an ongoing challenge to maintaining effective compliance oversight and market surveillance. IIROC is confident that FIX will assist the needs of both regulators and marketplaces by providing the standardization and flexibility required to keep pace with the evolution of Canada’s capital markets.

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