FIX Protocol trading standard 'to be released next month'

HFT standard aimed at providing like-for-like comparison

A new high-speed FIX Protocol trading standard for financial markets is expected to be released next month after being in development for much of last year, according to reports.

The new FIX standard, from the FIX Protocol industry standards body, is said to have been delayed as a result of some exchanges around the world not being able to meet the transaction speeds of the updated FIX standard. The existing FIX standard is already widely used by global markets, alongside the ITCH protocol.

But Financial News reports the updated standard is now ready to be unleashed next month, and it is expected to show "independent like-for-like comparison of trading speeds" among exchanges.

Time delays in transactions, also known as latency, play a critical role in the speed and accuracy of exchanges, so there is believed to have been much industry discussion before the rubber-stamping of the update, as some exchanges aren't as fast as others.

Up to now, there has historically been no independent means of comparing latency.

Henry Young, co-chair of the FIX Inter-Party Latency Working Group, told Financial News: "Some organisations know they're not the best-performing execution venue out there, and they really don't want that put in the spotlight."

Hugh Cumberland, business development manager at networking and telecoms firm Colt, which is a participant in the high-speed trading market, said of the new standard: "It is important that any future rules retain the benefits that HFT (high frequency trading) brings to the market, whilst eradicating and controlling any of the ill-effects or perceived unfairness.

"In order for all market participants to benefit from HFT, a more balanced approach of smarter regulation and increased connectivity to emerging liquidity centres is required."

HFT is an area which financial services regulators around the world are looking to get greater control of, as the reliance on technology to run markets has helped caused recent temporary market crashes in the US and elsewhere.

An international body that is tasked with helping control securities markets recently called for tighter limitations on high-speed trading systems. In a report, the International Organisation of Securities Commissions (IOSCO) demanded greater controls of high-speed trading systems to "mitigate risks", at a time when automatic algorithmic trading activity is increasing.

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