Setting the Course
Jim Kaye, Co-chair of the FPL Global Steering Committee discusses the future direction of FPL.
It was not long after my term as co-chair of the Global Steering Committee had begun earlier this year that I realised two very important things about FPL. One was that there was a huge amount of activity going on – much more than I had previously been aware of. The other was that there was an equally huge amount that FPL could be contributing to its members and, through them, to the industry as a whole. In this article I’m summarising elements of both of these, as I think it’s important that we all understand the huge contribution FPL has been making and will continue to make.
Spreading the message
FPL is engaged in more activities than many people realise. So part of our mission is, and indeed always has been, promoting what we’re doing and why we’re doing it. We’re dedicating more resources to communications and marketing, and we will continue to use our increasingly busy events schedule to educate and promote what we’re doing. We have full time event and marketing managers in London, and we are bringing on a new full time resource in Asia to help with these efforts. A key initiative for 2011 is to increase knowledge and adoption of FIX outside FPL’s historical core of North America, the UK and developed Asia; so this year many of our events are being held in other countries.
One complaint I have often heard is that it is hard to find information on the FPL website or, sometimes even in the specifications themselves. To help remedy this, we have initiated work to consolidate our documentation and make our content more searchable. Ultimately this will allow us to link the specifications to and from content from the discussion forums, FPL design documents and even other websites. The new FIXwiki gives us a platform to navigate from and to add to this pool of knowledge. The core of the specifications will continue to be tightly controlled, but members will be able to add their own comments and information. The intention is to allow the wider membership to add information on best practices and usage, provide feedback and so on.
Developing the standard
FPL’s Global Technical Committee (GTC) is the custodian of the protocol itself and is currently working on producing additional functionality to expand the support offered by FIX, especially within the exchanges and fixed income markets.
Alongside this work, the GTC is heavily engaged with other industry groups and standards bodies. This is part of an industry-wide initiative to maintain the ‘Investment Roadmap’ which was produced to leverage the free, open and non-proprietary standards already being used by firms across the industry, to provide market participants with consistent direction as to which messaging standard is most appropriate for use for each part of the trade life cycle for the major asset classes.
This work not only cements FIX’s position in the Roadmap, but also defines how FIX can work with other industry standards at the crossover points where FIX officially ‘ends’ and other standards take over. Of particular importance is FPL’s involvement in ISO 20022 – the ISO initiative is to develop a common business process for messaging for the financial industry. By ensuring that FIX becomes part of this ISO business model, we are in effect future-proofing FIX and at the same time validating the ISO design. This may sound somewhat unconnected from our day to day business, but it matters – it safeguards our investment in FIX as a trading messaging standard and helps to ensure that the next generation of standards continue to work for the industry.
Working to solve business issues
A significant part of FPL’s role extends beyond the maintenance, promotion and development of the FIX standards, to the practicalities of actually using those standards in the trading environment. This is a particularly important area at the moment given the amount of focus on electronic trading from regulators and investors. Various committees and working groups globally are focussing on defining best practices for areas such as trade allocations, execution venue reporting, algorithmic order parameter definitions and European consolidated market data, to name just a few. This activity isn’t solely about thinking through issues and writing documents – it’s also about FPL using its members to implement the results. This is what I see as one of FPL’s primary roles – not just defining standards and best practices, but also overseeing and encouraging their implementation.
In conclusion, the next couple of years are going to bring significant pressures for change across our industry, and I see FPL occupying a vital role to help us all understand and effect those changes.