The majority of swap execution facilities (SEFs), including BGC Derivative Markets, Bloomberg, trueEX, GFI Group, ICE Swap Trade, MarketAxess, Tradeweb, Tradition Trad-X and Tullett Prebon, have now adopted the FIX Protocol.
The FIX Trading Community has been working closely with the investment community since 2011 to develop guidelines on how FIX could be used to trade swaps following the requirement by Dodd-Frank a year earlier for regulated trading of certain swap instruments.
With the commencement of mandatory trading for selected swap instruments this year, this work has resulted in the establishment of FIX as the de-facto standard for swaps trading on SEFs.
The adoption of FIX has brought benefits to the industry:
1. Increased pre-trade transparency through faster and easier integration between market participants
2. Increased execution efficiency through lower cost of trading and connectivity
3. Additional benefits include the ability of the industry to deploy cross-asset trading platforms for the trading of swaps
Sassan Danesh, co-chair of the FIX Trading Community Global Fixed Income Subcommittee, and managing partner of Etrading Software, says: “The work of the FIX Trading Community, in partnership with market participants over the last three years, has shown the value of the collaborative ethos and has proved to be invaluable in accelerating the uptake of electronic trading in OTC derivatives.”
Justin Peterson, managing director and head of institutional technology at Tradeweb, says: "Tradeweb supports FIX for our fixed income and derivatives marketplaces in the US, Europe and Asia because there are tangible benefits to our clients. As electronic swaps trading continues to develop and evolve, we can add new functionalities or new types of instruments for our clients quickly and efficiently using the FIX Protocol."
Looking forward, with the extension of swaps electronic trading across the globe, the FIX Trading Community is looking to extend support of the protocol to trading platforms in Europe for Mifid II as well as to cater for regulatory requirements in Asia.