The Global FIX

FIX Protocol Limited (FPL) Committees have been expanding to include co-chairs for every group. This draws additional talent and support to the Chairmen’s role as FPL matures and engages with various audiences and global markets. The Global Fixed Income Committee (GFIC) is soliciting nominations for a co-chair to serve with Dan Doscas of Lehman Brothers. The role requires working with Dan in three primary areas, administration of the Committee, coordinating conference participation and various marketing activities and helping coordinate the internal communication—liaising with other FIX committees and working groups, the GFIC sub-committees and representation at the Global Steering Committee of FPL. If you are interested in making a nomination please contact Dan Doscas at

The Asset Managers Forum has been defining and documenting best practices for swaps. Five sub-committees have been formed to focus on compliance, confirms, legal, payments and collateral, trade execution and valuation. The development of best practices is the framework for the work. An executive summary will be put together based on the sub-committee recommendations and submitted for comment. The group is looking to form a dealer committee that would work with all the sub-committees. Anyone interested please contact Elisa Nuottajarvi (+1 646 637 9266).

FPL has a collaborative working group with the Financial Products Markup Language (FpML) group exploring how FIX can be used in conjunction with FpML documents. This would extend interoperability between fixed income electronic trading standards and electronic derivative trading standards and documentation. TradeWeb has proposed an actual implementation using interest rate swaps. A copy of the proposed implementation can be found by accessing the link below. http://www.fixprotocol.org/documents/1349/FIXFpML%20Proposal.doc

FIX Protocol Limited held a very successful conference in Cape Town, South Africa. There were 76 participants and the agenda included a presentation by the South Africa Bond Exchange which uses FIX. The Bond Exchange document can be found by accessing the link below: http://www.fixprotocol.org/documents/1430/FIX_SAConf_04_BESA.pdf

The eSyndicate Working Group has published a draft initial gap analysis. The document can be accessing the link below: http://www.fixprotocol.org/documents/1358/e-syndicate_Invitation_Messaging_v0.1.doc

FPL has announced that Chris Pickles of Radianz has been elected to the Co-Chair position of the Global Education and Marketing Committee and will be working alongside Ross Hutcheon of UBS Investment Bank.

A visit with the new Technical Committee Co-Chair. Eric Karpman of Bear Stearns was recently elected co-chair of the Global Fixed Income Technical Committee. newsFIX editor Cate Long asked him about his views of the work of the Technical Committee in developing and refining FIX standards.

CL: Have you thought about any special issues or topics you would like the Technical Committee to take up this year?

EK:

a) Closer integration between equities, fixed income, derivatives and market data segments of FIX.

b) Improved internal communications among all of our working groups.

c) More buy-side exposure to FIX.

d) Closer integration with The Bond Market Association.

e) Further development of multi-dealer hubs for more efficient communications and improved message flows.

f) Completion of fixed income prime brokerage support in FIX.

CL: The Prime Brokerage initiative is an important focus of the FIX Technical Committees work. How do you see the Committee moving forward?

EK: I have gathered all of the documentation that has been produced in the previous year. I am trying to analyze whether the business case compiled for this project has been comprehensive enough to represent most of the real scenarios that occur in the communications flow between the investment manager, the prime broker and the executing broker. I have come up with a number of questions that I plan to bring up on the next meeting of Prime Brokerage Working Group. The next step is to analyze the equities market and check the list of fields and their definitions and see if similar fields would be applicable in the fixed income world. After that process is completed we are going to suggest the technical implementation of the Prime Brokerage message fields.

CL: Fail rates in prime brokerage are an important issue. How would you see FIX helping improve that rate?

EK: We are heavily relying on the series of check sums throughout the complete process. Requests, Notifications and Allocation Acknowledgments are implemented in each step of interaction between the money manager, executing broker and a primer broker. We are trying to accurately process every instruction regardless of the flow stream: customer to executing broker, customer to prime broker, prime broker to customer, executing broker to prime broker or any other possible combination.

CL: Do you foresee the Technical Committee liaising with either the Global Derivatives Committee or other groups to insure standardization of tags or message types?

EK: Derivative products get more and more attention in the fixed income market now due to the reduced spreads and uncertainty with the interest rates. They are a part of most of the institutional portfolios on every credit desk. Based on this fact, we must work closely with the Derivatives Committee to make sure everything we do on the fixed income side goes in line with the format of the derivatives messages.

CL: Do you think the Technical Committee can help insure standardization between the US bond markets and non US markets for electronic trading?

EK: Most of the trades done in the fixed income market today involve multi-national investors, brokers, or exchanges. As a result, we must satisfy various international standards and business rules. In the Technical Committee, we will be working closely with European, Japanese and other working groups to make sure we are in line with their trading practices. Specifically, I think the Statement of Understanding we recently signed with International Primary Markets Association is going to help going forward in this direction.

CL: What is your background?

EK: I have over 15 years of a broad industry-based and academic experience. I have started my career on the vendor side (working for a software development company Executech); continued on the equity side at Fuji Bank, switched to the fixed income side when I joined JJ Kenney trading unit of Standard & Poor's and recently moved to manage the technology behind the bonds trading unit at Bear Stearns. The variety of industry experience substantially broadened my understanding of unique requirements in each of the industry segments and allowed me to implement the knowledge in designing, developing and implementing technical solutions for communications between market participants. I have also taught various courses at a number of colleges and universities in the tri-state area (I have a PhD in Computer Science), which enabled me to get comfortable with presenting various subjects to and persuading the large audiences as well as expanding my professional network. I have been an active member of many industry associations, have spoken on a number of conferences and was recently elected a Co-Chair of the FIX Protocol Fixed Income Technical Committee.

CL: Thank you and good luck with your efforts with the Technical Committee this year.

The Euro FIX

Stuart Taylor of Merrill Lynch, London has stepped up to chair the European Fixed Income Working Group. Special thanks Natasha Bonner-Fomes of Lehman Brothers, London for all the work she has done over the past two years in this role. Natasha helped organize the initial Euro Working Group, co-edited the FIX Implementation Guide, coordinated trade conferences and helped organize the FPL Scandinavian Fixed Income Conference.

The FPL response to the FSA European Directive on Markets in Financial Instruments-Data Dissemination and Consolidation Provisions

The US FIX

Hold the date – Learn FIX is a seminar to quick start using FIX and will be held on June 14th at the Bond Market Association offices in NYC. A morning session will cover the basics of implementing FIX and the lunch session will highlight the certification process. Participants can attend one or both sessions. More details to follow.

SEC report on the municipal bond market

Secondary trading costs in municipal securities