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Articles Feature Q2 2021

Driving Standards for Data Quality

By Maria Netley and Hugh Cumberland, EMEA Secretariat, FIX Trading Community

As we navigate the year following the year that defied prediction and had the potential to cause huge disruption in our industry, life goes on. Over the past 18 months we’ve heard such terms as “seminal moment” and “approaching the crossroads”. Whilst these circumstances were unique, market turmoil is hardly unknown, and looking back it’s worth reflecting on how the industry responds to all these different drivers for change, whilst ensuring that we don’t take our collective eyes off day-to-day operational risk and efficiency.

Maria Netley, FIX Trading Community

Aside from legacy and business as usual, one key theme going forward will be recovery from the pandemic, with no doubt frequent invocation of the phrase “build back better.” That’s all well and good, but what does it actually mean in practice? It is also not the only priority within the markets; ESG is now gaining in prominence where not a day goes by without at least an oblique reference on the front pages of the broadsheets or the mainstream news channels.

On the more traditional front, we will see an expansion in cross-asset and multi-asset trading and investing, and a continuing rise in the dominance of the machine. This means more AI, more machine learning, and more robotic processing.

We’re also hearing more about quantum computing in the news, but what does that mean for capital markets and financial services? The reality is probably a double-edged sword: a massive boost to computer power, delivered alongside a very real threat to existing encryption methods and standards. How can the industry cope with both at the same time? Quantum will also no doubt bleed into the world of digital assets, where a plethora of new instruments and trading styles are emerging – the reality being that the umbrella view of “crypto” covers a very broad and diverse church of investors, venues and infrastructures based on a variety of leading-edge and bleeding-edge technologies. Some will prevail, some will fall by the wayside, and regulators will have a big say in those outcomes, as will the green lobby.

Hugh Cumberland, FIX Trading Community

What is clear, however, is that there is a great deal of change and innovation happening in our industry, with many different drivers. The common theme will be how will existing infrastructures and operations cope and, critically, what part will open data standards play?

FIX deals with the past, present and future when it comes to free and open data standards. FIX supports legacy, business-as-usual and blue-sky ways of doing business, and the FIX Trading Community makes sure that those open data standards fit the purpose for both today and tomorrow. 

The collaboration of FIX Trading Community members continues to support innovation within the industry, with a number of working groups striving to ensure that the future of the Protocol is secure and future-proof.

Some examples of work going on within the FIX community:

-Equity and Fixed income Business Practices Working Groups focus on the practicalities of data standards in their respective markets, by looking at the challenges around the provision of data standards and the quality of data, focusing on providing guidance on how the FIX Protocol can provide that clarity, and identifying where further clarity is needed.  

-The Equities Consolidated Tape Working Group works alongside membership and our partner Industry Associations to identify new flags that are deemed essential to make the data within a consolidated tape clear and unambiguous. Five new equity flags have been identified and approved by the community for recommendation to European regulators.

-The Fixed Income Consolidated Tape Working Group works towards data standardisation and harmonisation of the information to be included into a fixed income consolidated tape, while also looking at additional flags that would be needed for the successful implementation in the EU and UK. 

-The ESG Working Group reviews ways to provide practical support around data standards for ESG, and defines ways in which the FIX Trading Community can support the industry.

-Post-Trade – the working group has started the next phase of post-trade messaging to cover netting and grouping, the settlement status for both cash and securities, and the ability to instruct a payment or security transaction.

-The Securities Lending Working Group works to develop a standard set of securities lending messages to be used on any platform to increase adoption, improve efficiencies and lower costs.

-Cybersecurity – FIX-over-TLS (FIXS) has been approved by the Global Technical Committee (GTC) and the group are looking to members to provide feedback on the challenges that member firms face across the industry. 

We are also delighted to announce the annual EMEA Trading Conference which this year will be held in a fully virtual, mixed-media format on 23 June 2021 and is a must-attend for all those concerned with keeping the lights on whilst trying to ensure that the industry is as future-proof as it can be. The conference will give a window on the many areas and initiatives in which FIX is leading the maintenance and development of the open standards that the industry needs.

The conference agenda is as ever-wide and thought-provoking as usual and features some of the industry’s leading practitioners. The subjects to be covered this year will include a look at the working practices of the buy side during COVID-19, and what the return might look like and we are delighted once again to be able to invite regulators from around the world to join our regulatory focus panel. The sessions will look at many of the practical issues facing our industry, from the challenges in equities and fixed income, innovation in fintech, regulatory developments such as CSDR, and a look at the impact of ESG trading across markets.

You can find the full agenda at fixtrading.org/emea2021agenda

The conference is free to join for all FIX members; if you are interested in learning more about membership and why you should join, please contact us at [email protected]