Presentation on theme: "J A N U A R Y 2 0 0 5 FIX Status update within the Fixed Income arena."— Presentation transcript:
J A N U A R Y 2 0 0 5 FIX Status update within the Fixed Income arena
Fixed Income process flows Business drivers for using FIX Current state of FIX for Fixed Income Real life example: JPMLink Agenda Gaps & Issues
Allocations Confirmations Electronic trades FIX trades Voice trades Matching/reconciliation Fixed Income process flows Purpose Market discovery Order management/upload Indication Of Interest (IOI) Market data Pre-trade allocations Purpose Automatic multi-dealer quoting Order execution Immediate orders Quote requests Single-dealer Multi-dealer Spread orders / conditional orders Multi asset trading Order management (working orders) FI market generally does not do partial fills Pre-trade Trade Post-trade
Business drivers for using FIX Deepens product offerings from dealers Standardizes and widens information flow to clients Simplifies marketing of full product breadth Efficiency for dealers and clients Integration with client and dealer trade workflow Easy to show requests to multiple dealers Batch trading Simplifies control and measurement of allocation of flow to different dealers Automation of allocations and other back-office processes New capabilities Extremely fast response to execution orders Integration of algorithmic trading models Confirms and allocations Seamless integration across asset classes STP True end-to-end STP -eliminates double-entry of trades
Gaps & Issues Feeling that early adoption provides limited upside Streaming market data OMS systems not ready Lead-time associated with vendor implementations Client implementation of vendor upgrades Feedback pre- and post-execution to dealers No information on how widely a quote has been distributed Trade cover and best execution Exposes internal inefficiencies to the external world Older implementations for Fixed Income trading tend to modify earlier version of the protocol rather than upgrading to the latest versions
Current state of FIX for Fixed Income FIX 4.4 released in April 2003 First version with full Fixed Income trading functionality Multi-dealer offerings Pre- and post-trade allocations Confirmations Multi-dealer trade execution feedback Single-dealer offerings Indication of Interests Allocations Confirmations Trade execution
Current state of FIX for Fixed Income (cont.) Order management systems Increasing interest from order management systems to support FIX 4.4 A couple of the major systems are in beta testing Majority of the leading order management systems will be 4.4 compatible Buy side Indication of Interest Upload of order book from OMS to trading application Import of trade execution within OMS Allocations: Pre & post trade Cheap FIX Engines availability Quick FIX is publicly available and used by some institutions
JPMLink FIX—applications In House system (Client developed) Provides clients with a direct, fast, and reliable way to execute trades Target: Custom order management system or black-box trading engines Particularly applicable if client already supports FIX OMS platform (Commercial) Provides clients using with the ability to execute trades using their OMS Easy integration for clients on OMS platforms that have been certified compatible Grey Label Provides a highly reliable, fast, high-volume connection for a third party Clients trading through the platform have FIX accounts (but not individual user IDs or GUI access) and settle trades vs. JPMorgan Trading GUI, blotter, and market data screens provided by third party service White Label Similar to previous, but no client information or trading accounts are provided Back to back trading
IPSEC VPN over the internet Private IP network connection Direct Point-to-Point Leased Line Existing client connections to can be reused FIX router In House systems Grey label White label OMS platform Sys core FI OMS FX OMS JPMLink FIX architecture Connection options Direct API using industry standard FIX protocol FX Trading via FIX 4.3 & 4.4 Immediate and RFQ orders Spot and Forward Swaps FI Trading via FIX 4.4 Immediate outright orders RFQ SDP/MDP, Subject Order, Spread Trading Support for all “bond-like” instruments
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