Imported from previous forum
[ original email was from John Harris - john.harris@bondmart.com ]
FPL issued a press release today announcing its support for an industry initiative to accelerate FIX adoption for fixed income.
The press release refers to a “decision by a consortium of 12 leading investment banks to jointly engage with existing and emerging fixed income market venues and ISVs to promote increased use of the FIX Protocol and other open standards such as FpML, across the trading life cycle of all fixed-income products,” but neglected to identify the consortium, its twelve members, and other information that would normally be in a press release announcing an agreement between two entities.
What is the name of the consortium and who are its members? Where is it based and what is its charter or purposes? Who leads it? Does it have a website?
An innocent oversight I’m sure, but respectfully suggest these details should have been in the press release. Hopefully someone can supply them here.
My consultancy has been retained by this group of banks to facilitate their initiative, and we put out a press release on the intiative recently.
One of the reasons for the paucity of information is the purely practical matter of getting so many banks’ PR teams to sign-off on any communique that has their name on it, but hopefully the information below will provide the FPL community with some info.
Happy to explain more either here, or via direct email.
Finextra:
Securities Tech Monitor:
http://www.securitiestechnologymonitor.com/news/swaps-fix-protocol-recommended-28057-1.html
The Trade News:
http://www.thetradenews.com/operations-technology/6264
FPL issued a press release today announcing its support for an industry initiative to accelerate FIX adoption for fixed income.
The press release refers to a “decision by a consortium of 12 leading investment banks to jointly engage with existing and emerging fixed income market venues and ISVs to promote increased use of the FIX Protocol and other open standards such as FpML, across the trading life cycle of all fixed-income products,” but neglected to identify the consortium, its twelve members, and other information that would normally be in a press release announcing an agreement between two entities.
What is the name of the consortium and who are its members? Where is it based and what is its charter or purposes? Who leads it? Does it have a website?
An innocent oversight I’m sure, but respectfully suggest these details should have been in the press release. Hopefully someone can supply them here.
[ original email was from John Harris - john.harris@bondmart.com ]
Thank you for the links and kind offer to provide additional explanation in this forum. Some immediate questions do come to mind, based on the information you provided.
The FPL press release refers to “a consortium of 12 leading investment banks.” Your press release of 31 May 2011 refers to a “Fixed Income Connectivity Working Group,” naming ten of its members but stating there are others.
Who are the two firms that account for the difference between the twelve cited in the FPL press release and ten cited in yours?
Why were these two not named in your press release?
Are there others beside these ten or twelve (whichever the case may be)?
What is the legal nature of the relationship among these firms? Have they formed a corporate body of some sort? If so, what is its name and where is it domiciled? If not, are they operating under a memorandum of understanding or similarly-styled agreement?
When you say that your “consultancy has been retained by this group of banks to facilitate their initiative,” do you mean they engaged you severally or jointly, through a corporate body?
In your press release you draw a distinction between the “Working Group” as a whole and a smaller body representing “[a] majority of the Working Group members…also sponsoring the development of an enhanced FIX specification and domain model that is intended to form the basis of an updated open industry standard for fixed income.”
Who are the members of this smaller group and why have they diverged in their efforts from the larger group?
What is the meaning of the term “domain model?”
Your press release states that “[t]he Working Group will also liaise with industry and standards organisations in order to migrate the governance for the new specifications to the appropriate standards bodies as quickly as possible.”
I infer from this statement that these new specifications are being developed outside of either (a) existing standards bodies or (b) a new standards body that will ultimately hold them - otherwise, there would be no need for migration. Is my inference correct? If not, would you please clarify the forum in which these new standards are being developed? Who owns them?
Going back to that subset of your “Working Group” that you describe as a majority of its members, if it is developing an “enhanced FIX Specification” as you say, as a legal matter, if you know, how can it do so outside of the auspices of FPL? Doesn’t FPL’s parent own the FIX specifications?
The report by Chris Kentouris in Securities Technology Monitor attributes to you the assertion that “the group’s guidelines would be officially endorsed by FIX Protocol Limited, the trade group promoting the FIX standard, and the Financial products Markup Language group, the trade group promoting the use of FpML protocols in the over-the-counter derivatives market.” Is the reporter accurate in that regard? Has FPL already taken a decision to endorse the consortium’s guidelines?
The Trade News quotes you as follows: “‘There will be an explosion of electronic trading venues for fixed income in the derivatives space,’ said Sassan Danesh, managing partner at Etrading Software, a trading technology supplier. ‘To make connectivity to all of these venues cheaper for the big dealer banks, FIX standards will be developed. Short term this will only affect the derivatives market, but long-term this will move to the cash market.’” I know that reporters make mistakes sometimes. Does this quote accurately reflect your views, i.e., that FIX standards will be developed to make connectivity cheaper for big banks?
The report in The Trade News also states that “[i]nitially the group will target brokers’ adoption of FIX before moving on to work with asset managers.” Is that accurate?
According to The Trade News, “Some fixed income functionality was incorporated in FIX 4.2, 4.4 and 5.0 but Danesh says that this was primarily developed between the buy-side and trading venues and even then it was not created in a uniform manner.” I wonder, again, if the reporter accurately characterized your remarks. The reason I ask is that it is indeed news to me that FIX’s fixed income functionality was primarily developed between the buy-side and trading venues and that it was not created in a uniform manner.
Thank you for your help with these questions, Sassan.
My consultancy has been retained by this group of banks to facilitate their initiative, and we put out a press release on the intiative recently.
One of the reasons for the paucity of information is the purely practical matter of getting so many banks’ PR teams to sign-off on any communique that has their name on it, but hopefully the information below will provide the FPL community with some info.
Happy to explain more either here, or via direct email.
Finextra:
Banks push FIX for fixed income tradingSecurities Tech Monitor:
http://www.securitiestechnologymonitor.com/news/swaps-fix-protocol-recommended-28057-1.htmlThe Trade News:
http://www.thetradenews.com/operations-technology/6264FPL issued a press release today announcing its support for an industry initiative to accelerate FIX adoption for fixed income.
The press release refers to a “decision by a consortium of 12 leading investment banks to jointly engage with existing and emerging fixed income market venues and ISVs to promote increased use of the FIX Protocol and other open standards such as FpML, across the trading life cycle of all fixed-income products,” but neglected to identify the consortium, its twelve members, and other information that would normally be in a press release announcing an agreement between two entities.
What is the name of the consortium and who are its members? Where is it based and what is its charter or purposes? Who leads it? Does it have a website?
An innocent oversight I’m sure, but respectfully suggest these details should have been in the press release. Hopefully someone can supply them here.
John,
FPL’s Global Fixed Income Technical Sub-committee will be working with Sassan and the banks that has retained his company to document the best practices for using FIX for fixed income trading, starting with CDS/IRS and eventually cash products as well. The work will be done under the guidance of the GFITech sub-committee. The banks requirements will be reviewed and determine how FIX will be used to meet those requirements. Any gaps identified as part of this best practices documentation will be submitted to the Global Technical Committee. Any firm that is an FPL member can participate in this initiative, not just the banks mentioned in the press release.
Lisa
Thank you for the links and kind offer to provide additional explanation in this forum. Some immediate questions do come to mind, based on the information you provided.
The FPL press release refers to “a consortium of 12 leading investment banks.” Your press release of 31 May 2011 refers to a “Fixed Income Connectivity Working Group,” naming ten of its members but stating there are others.
Who are the two firms that account for the difference between the twelve cited in the FPL press release and ten cited in yours?
Why were these two not named in your press release?
Are there others beside these ten or twelve (whichever the case may be)?
What is the legal nature of the relationship among these firms? Have they formed a corporate body of some sort? If so, what is its name and where is it domiciled? If not, are they operating under a memorandum of understanding or similarly-styled agreement?
When you say that your “consultancy has been retained by this group of banks to facilitate their initiative,” do you mean they engaged you severally or jointly, through a corporate body?
In your press release you draw a distinction between the “Working Group” as a whole and a smaller body representing “[a] majority of the Working Group members…also sponsoring the development of an enhanced FIX specification and domain model that is intended to form the basis of an updated open industry standard for fixed income.”
Who are the members of this smaller group and why have they diverged in their efforts from the larger group?
What is the meaning of the term “domain model?”
Your press release states that “[t]he Working Group will also liaise with industry and standards organisations in order to migrate the governance for the new specifications to the appropriate standards bodies as quickly as possible.”
I infer from this statement that these new specifications are being developed outside of either (a) existing standards bodies or (b) a new standards body that will ultimately hold them - otherwise, there would be no need for migration. Is my inference correct? If not, would you please clarify the forum in which these new standards are being developed? Who owns them?
Going back to that subset of your “Working Group” that you describe as a majority of its members, if it is developing an “enhanced FIX Specification” as you say, as a legal matter, if you know, how can it do so outside of the auspices of FPL? Doesn’t FPL’s parent own the FIX specifications?
The report by Chris Kentouris in Securities Technology Monitor attributes to you the assertion that “the group’s guidelines would be officially endorsed by FIX Protocol Limited, the trade group promoting the FIX standard, and the Financial products Markup Language group, the trade group promoting the use of FpML protocols in the over-the-counter derivatives market.” Is the reporter accurate in that regard? Has FPL already taken a decision to endorse the consortium’s guidelines?
The Trade News quotes you as follows: “‘There will be an explosion of electronic trading venues for fixed income in the derivatives space,’ said Sassan Danesh, managing partner at Etrading Software, a trading technology supplier. ‘To make connectivity to all of these venues cheaper for the big dealer banks, FIX standards will be developed. Short term this will only affect the derivatives market, but long-term this will move to the cash market.’” I know that reporters make mistakes sometimes. Does this quote accurately reflect your views, i.e., that FIX standards will be developed to make connectivity cheaper for big banks?
The report in The Trade News also states that “[i]nitially the group will target brokers’ adoption of FIX before moving on to work with asset managers.” Is that accurate?
According to The Trade News, “Some fixed income functionality was incorporated in FIX 4.2, 4.4 and 5.0 but Danesh says that this was primarily developed between the buy-side and trading venues and even then it was not created in a uniform manner.” I wonder, again, if the reporter accurately characterized your remarks. The reason I ask is that it is indeed news to me that FIX’s fixed income functionality was primarily developed between the buy-side and trading venues and that it was not created in a uniform manner.
Thank you for your help with these questions, Sassan.
My consultancy has been retained by this group of banks to facilitate their initiative, and we put out a press release on the intiative recently.
One of the reasons for the paucity of information is the purely practical matter of getting so many banks’ PR teams to sign-off on any communique that has their name on it, but hopefully the information below will provide the FPL community with some info.
Happy to explain more either here, or via direct email.
Finextra:
Banks push FIX for fixed income tradingSecurities Tech Monitor:
http://www.securitiestechnologymonitor.com/news/swaps-fix-protocol-recommended-28057-1.htmlThe Trade News:
http://www.thetradenews.com/operations-technology/6264FPL issued a press release today announcing its support for an industry initiative to accelerate FIX adoption for fixed income.
The press release refers to a “decision by a consortium of 12 leading investment banks to jointly engage with existing and emerging fixed income market venues and ISVs to promote increased use of the FIX Protocol and other open standards such as FpML, across the trading life cycle of all fixed-income products,” but neglected to identify the consortium, its twelve members, and other information that would normally be in a press release announcing an agreement between two entities.
What is the name of the consortium and who are its members? Where is it based and what is its charter or purposes? Who leads it? Does it have a website?
An innocent oversight I’m sure, but respectfully suggest these details should have been in the press release. Hopefully someone can supply them here.
[ original email was from John Harris - john.harris@bondmart.com ]
Thank you, Lisa. My questions for Sasson remain, but I appreciate this additional information you provided regarding process.
Of course, FIX users regularly find deficiencies in the protocol and work within FPL’s existing structures and facilities to remedy those. You and I, for example, collaborated on the fixed income gap analysis that led in part to the promulgation of FIX 4.4.
I wonder why these banks deemed these long established procedures inadequate in this case? Why didn’t they, for example, request the establishment of a working group under FPL’s auspices and hash out openly what they see as the gaps?
John,
FPL’s Global Fixed Income Technical Sub-committee will be working with Sassan and the banks that has retained his company to document the best practices for using FIX for fixed income trading, starting with CDS/IRS and eventually cash products as well. The work will be done under the guidance of the GFITech sub-committee. The banks requirements will be reviewed and determine how FIX will be used to meet those requirements. Any gaps identified as part of this best practices documentation will be submitted to the Global Technical Committee. Any firm that is an FPL member can participate in this initiative, not just the banks mentioned in the press release.
Lisa
Thank you for the links and kind offer to provide additional explanation in this forum. Some immediate questions do come to mind, based on the information you provided.
The FPL press release refers to “a consortium of 12 leading investment banks.” Your press release of 31 May 2011 refers to a “Fixed Income Connectivity Working Group,” naming ten of its members but stating there are others.
Who are the two firms that account for the difference between the twelve cited in the FPL press release and ten cited in yours?
Why were these two not named in your press release?
Are there others beside these ten or twelve (whichever the case may be)?
What is the legal nature of the relationship among these firms? Have they formed a corporate body of some sort? If so, what is its name and where is it domiciled? If not, are they operating under a memorandum of understanding or similarly-styled agreement?
When you say that your “consultancy has been retained by this group of banks to facilitate their initiative,” do you mean they engaged you severally or jointly, through a corporate body?
In your press release you draw a distinction between the “Working Group” as a whole and a smaller body representing “[a] majority of the Working Group members…also sponsoring the development of an enhanced FIX specification and domain model that is intended to form the basis of an updated open industry standard for fixed income.”
Who are the members of this smaller group and why have they diverged in their efforts from the larger group?
What is the meaning of the term “domain model?”
Your press release states that “[t]he Working Group will also liaise with industry and standards organisations in order to migrate the governance for the new specifications to the appropriate standards bodies as quickly as possible.”
I infer from this statement that these new specifications are being developed outside of either (a) existing standards bodies or (b) a new standards body that will ultimately hold them - otherwise, there would be no need for migration. Is my inference correct? If not, would you please clarify the forum in which these new standards are being developed? Who owns them?
Going back to that subset of your “Working Group” that you describe as a majority of its members, if it is developing an “enhanced FIX Specification” as you say, as a legal matter, if you know, how can it do so outside of the auspices of FPL? Doesn’t FPL’s parent own the FIX specifications?
The report by Chris Kentouris in Securities Technology Monitor attributes to you the assertion that “the group’s guidelines would be officially endorsed by FIX Protocol Limited, the trade group promoting the FIX standard, and the Financial products Markup Language group, the trade group promoting the use of FpML protocols in the over-the-counter derivatives market.” Is the reporter accurate in that regard? Has FPL already taken a decision to endorse the consortium’s guidelines?
The Trade News quotes you as follows: “‘There will be an explosion of electronic trading venues for fixed income in the derivatives space,’ said Sassan Danesh, managing partner at Etrading Software, a trading technology supplier. ‘To make connectivity to all of these venues cheaper for the big dealer banks, FIX standards will be developed. Short term this will only affect the derivatives market, but long-term this will move to the cash market.’” I know that reporters make mistakes sometimes. Does this quote accurately reflect your views, i.e., that FIX standards will be developed to make connectivity cheaper for big banks?
The report in The Trade News also states that “[i]nitially the group will target brokers’ adoption of FIX before moving on to work with asset managers.” Is that accurate?
According to The Trade News, “Some fixed income functionality was incorporated in FIX 4.2, 4.4 and 5.0 but Danesh says that this was primarily developed between the buy-side and trading venues and even then it was not created in a uniform manner.” I wonder, again, if the reporter accurately characterized your remarks. The reason I ask is that it is indeed news to me that FIX’s fixed income functionality was primarily developed between the buy-side and trading venues and that it was not created in a uniform manner.
Thank you for your help with these questions, Sassan.
My consultancy has been retained by this group of banks to facilitate their initiative, and we put out a press release on the intiative recently.
One of the reasons for the paucity of information is the purely practical matter of getting so many banks’ PR teams to sign-off on any communique that has their name on it, but hopefully the information below will provide the FPL community with some info.
Happy to explain more either here, or via direct email.
Finextra:
Banks push FIX for fixed income tradingSecurities Tech Monitor:
http://www.securitiestechnologymonitor.com/news/swaps-fix-protocol-recommended-28057-1.htmlThe Trade News:
http://www.thetradenews.com/operations-technology/6264FPL issued a press release today announcing its support for an industry initiative to accelerate FIX adoption for fixed income.
The press release refers to a “decision by a consortium of 12 leading investment banks to jointly engage with existing and emerging fixed income market venues and ISVs to promote increased use of the FIX Protocol and other open standards such as FpML, across the trading life cycle of all fixed-income products,” but neglected to identify the consortium, its twelve members, and other information that would normally be in a press release announcing an agreement between two entities.
What is the name of the consortium and who are its members? Where is it based and what is its charter or purposes? Who leads it? Does it have a website?
An innocent oversight I’m sure, but respectfully suggest these details should have been in the press release. Hopefully someone can supply them here.
John
I think Lisa has answered some of your questions, and I will compile a list of Q&As to address as many of your remaining questions as possible.
We will get to this in the next few days/weeks.
In the meantime, please note that the aim of the FI Connectivity Working Group of banks is to accelerate the adoption of a consistent set of FIX standards for trading fixed income products by actively promoting the benefits of FIX, and participation in this FPL initiative.
We think there is huge benefit to the entire industry in promoting such open industry standards (we articulated the benefits in our press release).
Thank you, Lisa. My questions for Sasson remain, but I appreciate this additional information you provided regarding process.
Of course, FIX users regularly find deficiencies in the protocol and work within FPL’s existing structures and facilities to remedy those. You and I, for example, collaborated on the fixed income gap analysis that led in part to the promulgation of FIX 4.4.
I wonder why these banks deemed these long established procedures inadequate in this case? Why didn’t they, for example, request the establishment of a working group under FPL’s auspices and hash out openly what they see as the gaps?
John,
FPL’s Global Fixed Income Technical Sub-committee will be working with Sassan and the banks that has retained his company to document the best practices for using FIX for fixed income trading, starting with CDS/IRS and eventually cash products as well. The work will be done under the guidance of the GFITech sub-committee. The banks requirements will be reviewed and determine how FIX will be used to meet those requirements. Any gaps identified as part of this best practices documentation will be submitted to the Global Technical Committee. Any firm that is an FPL member can participate in this initiative, not just the banks mentioned in the press release.
Lisa
Thank you for the links and kind offer to provide additional explanation in this forum. Some immediate questions do come to mind, based on the information you provided.
The FPL press release refers to “a consortium of 12 leading investment banks.” Your press release of 31 May 2011 refers to a “Fixed Income Connectivity Working Group,” naming ten of its members but stating there are others.
Who are the two firms that account for the difference between the twelve cited in the FPL press release and ten cited in yours?
Why were these two not named in your press release?
Are there others beside these ten or twelve (whichever the case may be)?
What is the legal nature of the relationship among these firms? Have they formed a corporate body of some sort? If so, what is its name and where is it domiciled? If not, are they operating under a memorandum of understanding or similarly-styled agreement?
When you say that your “consultancy has been retained by this group of banks to facilitate their initiative,” do you mean they engaged you severally or jointly, through a corporate body?
In your press release you draw a distinction between the “Working Group” as a whole and a smaller body representing “[a] majority of the Working Group members…also sponsoring the development of an enhanced FIX specification and domain model that is intended to form the basis of an updated open industry standard for fixed income.”
Who are the members of this smaller group and why have they diverged in their efforts from the larger group?
What is the meaning of the term “domain model?”
Your press release states that “[t]he Working Group will also liaise with industry and standards organisations in order to migrate the governance for the new specifications to the appropriate standards bodies as quickly as possible.”
I infer from this statement that these new specifications are being developed outside of either (a) existing standards bodies or (b) a new standards body that will ultimately hold them - otherwise, there would be no need for migration. Is my inference correct? If not, would you please clarify the forum in which these new standards are being developed? Who owns them?
Going back to that subset of your “Working Group” that you describe as a majority of its members, if it is developing an “enhanced FIX Specification” as you say, as a legal matter, if you know, how can it do so outside of the auspices of FPL? Doesn’t FPL’s parent own the FIX specifications?
The report by Chris Kentouris in Securities Technology Monitor attributes to you the assertion that “the group’s guidelines would be officially endorsed by FIX Protocol Limited, the trade group promoting the FIX standard, and the Financial products Markup Language group, the trade group promoting the use of FpML protocols in the over-the-counter derivatives market.” Is the reporter accurate in that regard? Has FPL already taken a decision to endorse the consortium’s guidelines?
The Trade News quotes you as follows: “‘There will be an explosion of electronic trading venues for fixed income in the derivatives space,’ said Sassan Danesh, managing partner at Etrading Software, a trading technology supplier. ‘To make connectivity to all of these venues cheaper for the big dealer banks, FIX standards will be developed. Short term this will only affect the derivatives market, but long-term this will move to the cash market.’” I know that reporters make mistakes sometimes. Does this quote accurately reflect your views, i.e., that FIX standards will be developed to make connectivity cheaper for big banks?
The report in The Trade News also states that “[i]nitially the group will target brokers’ adoption of FIX before moving on to work with asset managers.” Is that accurate?
According to The Trade News, “Some fixed income functionality was incorporated in FIX 4.2, 4.4 and 5.0 but Danesh says that this was primarily developed between the buy-side and trading venues and even then it was not created in a uniform manner.” I wonder, again, if the reporter accurately characterized your remarks. The reason I ask is that it is indeed news to me that FIX’s fixed income functionality was primarily developed between the buy-side and trading venues and that it was not created in a uniform manner.
Thank you for your help with these questions, Sassan.
My consultancy has been retained by this group of banks to facilitate their initiative, and we put out a press release on the intiative recently.
One of the reasons for the paucity of information is the purely practical matter of getting so many banks’ PR teams to sign-off on any communique that has their name on it, but hopefully the information below will provide the FPL community with some info.
Happy to explain more either here, or via direct email.
Finextra:
Banks push FIX for fixed income tradingSecurities Tech Monitor:
http://www.securitiestechnologymonitor.com/news/swaps-fix-protocol-recommended-28057-1.htmlThe Trade News:
http://www.thetradenews.com/operations-technology/6264FPL issued a press release today announcing its support for an industry initiative to accelerate FIX adoption for fixed income.
The press release refers to a “decision by a consortium of 12 leading investment banks to jointly engage with existing and emerging fixed income market venues and ISVs to promote increased use of the FIX Protocol and other open standards such as FpML, across the trading life cycle of all fixed-income products,” but neglected to identify the consortium, its twelve members, and other information that would normally be in a press release announcing an agreement between two entities.
What is the name of the consortium and who are its members? Where is it based and what is its charter or purposes? Who leads it? Does it have a website?
An innocent oversight I’m sure, but respectfully suggest these details should have been in the press release. Hopefully someone can supply them here.
[ original email was from John Harris - john.harris@bondmart.com ]
My friends in the FIX community,
Twenty-two days have passed with no further attempt to answer my questions concerning this “consortium.” At this point it is fair to assume that truthful answers are damning and will not be forthcoming.
Clearly this so-called consortium is attempting to hijack the FIX Protocol for its own purposes and in a manner that is contrary to the strategic interests of many FPL members, contributors, and users. Unless this effort is stopped, the consortium will succeed in promulgating as “best practices” a protocol implementation that perpetuates an anticompetitive, bifurcated market structure in which dealers trade with one another anonymously through inter-dealer brokers and the great mass of the market may only trade with dealers. The inter-dealer brokers are to be kept in their stalls and blocked from offering their exchange facilities to the broader market. Similarly, the ECNs are to be confined to order-routing functions, with only selected dealers as destinations. The strawman document released yesterday makes this perfectly clear. Obviously it has been developed over many months, not openly but in secret.
Why investment companies would go along with this scheme is beyond me. I can appreciate that some of them rely on consortium members for product distribution and thus are beholden to them. I can only assume that the others are too distracted to realize how their interests are harmed. Clearly the consulting firms who have contributed to FIX over the years are compromised.
This is a watershed moment for FIX. If members and contributors do not hold the GSC to account now, they will have acceded to a hijacking of the protocol for nefarious purposes. There will not have been a debate. Critics will have been silenced.
Trust me when I say that most of you know less about FPL’s governance structure than you think you know, or should know. FPL does not own FIX, as is widely believed. Rather, an offshore trust owns FPL, and FIX, and all FIX-related entities are controlled through an impossibly complex, opaque, dense arrangement of dubious benefit to the market at large. The FIX Protocol is not like open-source software. Nothing prevents FPL from restricting access to or use of the protocol in the future, or from erecting high pay-walls to its use. Those of us who thought we were contributing our ideas and efforts to something that will be open and free forever are sadly mistaken.
It is time for the GSC to be forthcoming about this initiative and the future of FIX, and to open the process underlying this initiative to public scrutiny and comment. Attempting to hide the truth will not work.
Sincerely,
John Harris
John
I think Lisa has answered some of your questions, and I will compile a list of Q&As to address as many of your remaining questions as possible.
We will get to this in the next few days/weeks.
In the meantime, please note that the aim of the FI Connectivity Working Group of banks is to accelerate the adoption of a consistent set of FIX standards for trading fixed income products by actively promoting the benefits of FIX, and participation in this FPL initiative.
We think there is huge benefit to the entire industry in promoting such open industry standards (we articulated the benefits in our press release).
Thank you, Lisa. My questions for Sasson remain, but I appreciate this additional information you provided regarding process.
Of course, FIX users regularly find deficiencies in the protocol and work within FPL’s existing structures and facilities to remedy those. You and I, for example, collaborated on the fixed income gap analysis that led in part to the promulgation of FIX 4.4.
I wonder why these banks deemed these long established procedures inadequate in this case? Why didn’t they, for example, request the establishment of a working group under FPL’s auspices and hash out openly what they see as the gaps?
John,
FPL’s Global Fixed Income Technical Sub-committee will be working with Sassan and the banks that has retained his company to document the best practices for using FIX for fixed income trading, starting with CDS/IRS and eventually cash products as well. The work will be done under the guidance of the GFITech sub-committee. The banks requirements will be reviewed and determine how FIX will be used to meet those requirements. Any gaps identified as part of this best practices documentation will be submitted to the Global Technical Committee. Any firm that is an FPL member can participate in this initiative, not just the banks mentioned in the press release.
Lisa
Thank you for the links and kind offer to provide additional explanation in this forum. Some immediate questions do come to mind, based on the information you provided.
The FPL press release refers to “a consortium of 12 leading investment banks.” Your press release of 31 May 2011 refers to a “Fixed Income Connectivity Working Group,” naming ten of its members but stating there are others.
Who are the two firms that account for the difference between the twelve cited in the FPL press release and ten cited in yours?
Why were these two not named in your press release?
Are there others beside these ten or twelve (whichever the case may be)?
What is the legal nature of the relationship among these firms? Have they formed a corporate body of some sort? If so, what is its name and where is it domiciled? If not, are they operating under a memorandum of understanding or similarly-styled agreement?
When you say that your “consultancy has been retained by this group of banks to facilitate their initiative,” do you mean they engaged you severally or jointly, through a corporate body?
In your press release you draw a distinction between the “Working Group” as a whole and a smaller body representing “[a] majority of the Working Group members…also sponsoring the development of an enhanced FIX specification and domain model that is intended to form the basis of an updated open industry standard for fixed income.”
Who are the members of this smaller group and why have they diverged in their efforts from the larger group?
What is the meaning of the term “domain model?”
Your press release states that “[t]he Working Group will also liaise with industry and standards organisations in order to migrate the governance for the new specifications to the appropriate standards bodies as quickly as possible.”
I infer from this statement that these new specifications are being developed outside of either (a) existing standards bodies or (b) a new standards body that will ultimately hold them - otherwise, there would be no need for migration. Is my inference correct? If not, would you please clarify the forum in which these new standards are being developed? Who owns them?
Going back to that subset of your “Working Group” that you describe as a majority of its members, if it is developing an “enhanced FIX Specification” as you say, as a legal matter, if you know, how can it do so outside of the auspices of FPL? Doesn’t FPL’s parent own the FIX specifications?
The report by Chris Kentouris in Securities Technology Monitor attributes to you the assertion that “the group’s guidelines would be officially endorsed by FIX Protocol Limited, the trade group promoting the FIX standard, and the Financial products Markup Language group, the trade group promoting the use of FpML protocols in the over-the-counter derivatives market.” Is the reporter accurate in that regard? Has FPL already taken a decision to endorse the consortium’s guidelines?
The Trade News quotes you as follows: “‘There will be an explosion of electronic trading venues for fixed income in the derivatives space,’ said Sassan Danesh, managing partner at Etrading Software, a trading technology supplier. ‘To make connectivity to all of these venues cheaper for the big dealer banks, FIX standards will be developed. Short term this will only affect the derivatives market, but long-term this will move to the cash market.’” I know that reporters make mistakes sometimes. Does this quote accurately reflect your views, i.e., that FIX standards will be developed to make connectivity cheaper for big banks?
The report in The Trade News also states that “[i]nitially the group will target brokers’ adoption of FIX before moving on to work with asset managers.” Is that accurate?
According to The Trade News, “Some fixed income functionality was incorporated in FIX 4.2, 4.4 and 5.0 but Danesh says that this was primarily developed between the buy-side and trading venues and even then it was not created in a uniform manner.” I wonder, again, if the reporter accurately characterized your remarks. The reason I ask is that it is indeed news to me that FIX’s fixed income functionality was primarily developed between the buy-side and trading venues and that it was not created in a uniform manner.
Thank you for your help with these questions, Sassan.
My consultancy has been retained by this group of banks to facilitate their initiative, and we put out a press release on the intiative recently.
One of the reasons for the paucity of information is the purely practical matter of getting so many banks’ PR teams to sign-off on any communique that has their name on it, but hopefully the information below will provide the FPL community with some info.
Happy to explain more either here, or via direct email.
Finextra:
Banks push FIX for fixed income tradingSecurities Tech Monitor:
http://www.securitiestechnologymonitor.com/news/swaps-fix-protocol-recommended-28057-1.htmlThe Trade News:
http://www.thetradenews.com/operations-technology/6264FPL issued a press release today announcing its support for an industry initiative to accelerate FIX adoption for fixed income.
The press release refers to a “decision by a consortium of 12 leading investment banks to jointly engage with existing and emerging fixed income market venues and ISVs to promote increased use of the FIX Protocol and other open standards such as FpML, across the trading life cycle of all fixed-income products,” but neglected to identify the consortium, its twelve members, and other information that would normally be in a press release announcing an agreement between two entities.
What is the name of the consortium and who are its members? Where is it based and what is its charter or purposes? Who leads it? Does it have a website?
An innocent oversight I’m sure, but respectfully suggest these details should have been in the press release. Hopefully someone can supply them here.
John
Thank you for pointing out that 22 days has elapsed since my post which committed me to creating a Q&A list “in a few days/weeks”.
The reason for my relative tardiness is that we have had an overwhelmingly positive response to this initiative from the FPL community, and this has kept us very busy indeed.
I am sorry that you have interpreted this slowness as meaning that FICWG bank members have no intention of responding. Please rest assured that we do plan to produce our Q&A list shortly.
Finally, I have to say that the motives you ascribe to FICWG members are very far removed from my own personal experience. Whilst I appreciate that you may see me as “compromised”, I do want to ensure that the record is straight in this forum: FICWG’s intentions are to promote open industry standards, and we make no apologies for wanting to work with organisations, such as FPL, who also share this goal.
My friends in the FIX community,
Twenty-two days have passed with no further attempt to answer my questions concerning this “consortium.” At this point it is fair to assume that truthful answers are damning and will not be forthcoming.
Clearly this so-called consortium is attempting to hijack the FIX Protocol for its own purposes and in a manner that is contrary to the strategic interests of many FPL members, contributors, and users. Unless this effort is stopped, the consortium will succeed in promulgating as “best practices” a protocol implementation that perpetuates an anticompetitive, bifurcated market structure in which dealers trade with one another anonymously through inter-dealer brokers and the great mass of the market may only trade with dealers. The inter-dealer brokers are to be kept in their stalls and blocked from offering their exchange facilities to the broader market. Similarly, the ECNs are to be confined to order-routing functions, with only selected dealers as destinations. The strawman document released yesterday makes this perfectly clear. Obviously it has been developed over many months, not openly but in secret.
Why investment companies would go along with this scheme is beyond me. I can appreciate that some of them rely on consortium members for product distribution and thus are beholden to them. I can only assume that the others are too distracted to realize how their interests are harmed. Clearly the consulting firms who have contributed to FIX over the years are compromised.
This is a watershed moment for FIX. If members and contributors do not hold the GSC to account now, they will have acceded to a hijacking of the protocol for nefarious purposes. There will not have been a debate. Critics will have been silenced.
Trust me when I say that most of you know less about FPL’s governance structure than you think you know, or should know. FPL does not own FIX, as is widely believed. Rather, an offshore trust owns FPL, and FIX, and all FIX-related entities are controlled through an impossibly complex, opaque, dense arrangement of dubious benefit to the market at large. The FIX Protocol is not like open-source software. Nothing prevents FPL from restricting access to or use of the protocol in the future, or from erecting high pay-walls to its use. Those of us who thought we were contributing our ideas and efforts to something that will be open and free forever are sadly mistaken.
It is time for the GSC to be forthcoming about this initiative and the future of FIX, and to open the process underlying this initiative to public scrutiny and comment. Attempting to hide the truth will not work.
Sincerely,
John HarrisJohn
I think Lisa has answered some of your questions, and I will compile a list of Q&As to address as many of your remaining questions as possible.
We will get to this in the next few days/weeks.
In the meantime, please note that the aim of the FI Connectivity Working Group of banks is to accelerate the adoption of a consistent set of FIX standards for trading fixed income products by actively promoting the benefits of FIX, and participation in this FPL initiative.
We think there is huge benefit to the entire industry in promoting such open industry standards (we articulated the benefits in our press release).
Thank you, Lisa. My questions for Sasson remain, but I appreciate this additional information you provided regarding process.
Of course, FIX users regularly find deficiencies in the protocol and work within FPL’s existing structures and facilities to remedy those. You and I, for example, collaborated on the fixed income gap analysis that led in part to the promulgation of FIX 4.4.
I wonder why these banks deemed these long established procedures inadequate in this case? Why didn’t they, for example, request the establishment of a working group under FPL’s auspices and hash out openly what they see as the gaps?
John,
FPL’s Global Fixed Income Technical Sub-committee will be working with Sassan and the banks that has retained his company to document the best practices for using FIX for fixed income trading, starting with CDS/IRS and eventually cash products as well. The work will be done under the guidance of the GFITech sub-committee. The banks requirements will be reviewed and determine how FIX will be used to meet those requirements. Any gaps identified as part of this best practices documentation will be submitted to the Global Technical Committee. Any firm that is an FPL member can participate in this initiative, not just the banks mentioned in the press release.
Lisa
Thank you for the links and kind offer to provide additional explanation in this forum. Some immediate questions do come to mind, based on the information you provided.
The FPL press release refers to “a consortium of 12 leading investment banks.” Your press release of 31 May 2011 refers to a “Fixed Income Connectivity Working Group,” naming ten of its members but stating there are others.
Who are the two firms that account for the difference between the twelve cited in the FPL press release and ten cited in yours?
Why were these two not named in your press release?
Are there others beside these ten or twelve (whichever the case may be)?
What is the legal nature of the relationship among these firms? Have they formed a corporate body of some sort? If so, what is its name and where is it domiciled? If not, are they operating under a memorandum of understanding or similarly-styled agreement?
When you say that your “consultancy has been retained by this group of banks to facilitate their initiative,” do you mean they engaged you severally or jointly, through a corporate body?
In your press release you draw a distinction between the “Working Group” as a whole and a smaller body representing “[a] majority of the Working Group members…also sponsoring the development of an enhanced FIX specification and domain model that is intended to form the basis of an updated open industry standard for fixed income.”
Who are the members of this smaller group and why have they diverged in their efforts from the larger group?
What is the meaning of the term “domain model?”
Your press release states that “[t]he Working Group will also liaise with industry and standards organisations in order to migrate the governance for the new specifications to the appropriate standards bodies as quickly as possible.”
I infer from this statement that these new specifications are being developed outside of either (a) existing standards bodies or (b) a new standards body that will ultimately hold them - otherwise, there would be no need for migration. Is my inference correct? If not, would you please clarify the forum in which these new standards are being developed? Who owns them?
Going back to that subset of your “Working Group” that you describe as a majority of its members, if it is developing an “enhanced FIX Specification” as you say, as a legal matter, if you know, how can it do so outside of the auspices of FPL? Doesn’t FPL’s parent own the FIX specifications?
The report by Chris Kentouris in Securities Technology Monitor attributes to you the assertion that “the group’s guidelines would be officially endorsed by FIX Protocol Limited, the trade group promoting the FIX standard, and the Financial products Markup Language group, the trade group promoting the use of FpML protocols in the over-the-counter derivatives market.” Is the reporter accurate in that regard? Has FPL already taken a decision to endorse the consortium’s guidelines?
The Trade News quotes you as follows: “‘There will be an explosion of electronic trading venues for fixed income in the derivatives space,’ said Sassan Danesh, managing partner at Etrading Software, a trading technology supplier. ‘To make connectivity to all of these venues cheaper for the big dealer banks, FIX standards will be developed. Short term this will only affect the derivatives market, but long-term this will move to the cash market.’” I know that reporters make mistakes sometimes. Does this quote accurately reflect your views, i.e., that FIX standards will be developed to make connectivity cheaper for big banks?
The report in The Trade News also states that “[i]nitially the group will target brokers’ adoption of FIX before moving on to work with asset managers.” Is that accurate?
According to The Trade News, “Some fixed income functionality was incorporated in FIX 4.2, 4.4 and 5.0 but Danesh says that this was primarily developed between the buy-side and trading venues and even then it was not created in a uniform manner.” I wonder, again, if the reporter accurately characterized your remarks. The reason I ask is that it is indeed news to me that FIX’s fixed income functionality was primarily developed between the buy-side and trading venues and that it was not created in a uniform manner.
Thank you for your help with these questions, Sassan.
My consultancy has been retained by this group of banks to facilitate their initiative, and we put out a press release on the intiative recently.
One of the reasons for the paucity of information is the purely practical matter of getting so many banks’ PR teams to sign-off on any communique that has their name on it, but hopefully the information below will provide the FPL community with some info.
Happy to explain more either here, or via direct email.
Finextra:
Banks push FIX for fixed income tradingSecurities Tech Monitor:
http://www.securitiestechnologymonitor.com/news/swaps-fix-protocol-recommended-28057-1.htmlThe Trade News:
http://www.thetradenews.com/operations-technology/6264FPL issued a press release today announcing its support for an industry initiative to accelerate FIX adoption for fixed income.
The press release refers to a “decision by a consortium of 12 leading investment banks to jointly engage with existing and emerging fixed income market venues and ISVs to promote increased use of the FIX Protocol and other open standards such as FpML, across the trading life cycle of all fixed-income products,” but neglected to identify the consortium, its twelve members, and other information that would normally be in a press release announcing an agreement between two entities.
What is the name of the consortium and who are its members? Where is it based and what is its charter or purposes? Who leads it? Does it have a website?
An innocent oversight I’m sure, but respectfully suggest these details should have been in the press release. Hopefully someone can supply them here.
[ original email was from John Harris - john.harris@bondmart.com ]
My pleasure, Sassan. But you did mischaracterize my remarks. I did not interpret your “slowness as meaning that FICWG bank members have no intention of responding.” What I said, unambiguously, is that “it is fair to assume that TRUTHFUL answers are damning and will not be forthcoming” (emphasis added to the operative term). Your response, though I sincerely appreciate it, only strengthens my case.
I am glad you have had such a felicitous experience with your clients. Perhaps that will be some small measure of comfort someday to some child not yet born, to parents who have yet to meet, who will chafe at paying debts he did not incur to fund bonuses your clients did not earn. Because this cheap, little stunt of hijacking the FIX protocol really just comes down to bonus dollars for cartel employees, doesn’t it, Sassan? It’s really about defining the acceptable boundaries of competition and market structure for trading credit and interest-rate derivatives, isn’t it, Sassan, so as to control the market for the benefit of cartel members and their lackeys and thus preserve and expand their bonus pools?
Who can’t see through the cheap, little stunt of decreeing post-trade services “out of scope?” What’s amazing is not that the cartel would be so brazen, but that those outside the cartel are so cowed as to go along without resisting. If nothing else, I thought Chicago people were tougher than that.
Competition is a powerful force for good and the advancement of civilization. It appears to me that FPL is about to default on its promises. In the grand scheme of things, why that is matters less than what is to be done about it. Perhaps the time has come for the curative powers of competition to visit the market for trading standards.
John
Thank you for pointing out that 22 days has elapsed since my post which committed me to creating a Q&A list “in a few days/weeks”.
The reason for my relative tardiness is that we have had an overwhelmingly positive response to this initiative from the FPL community, and this has kept us very busy indeed.
I am sorry that you have interpreted this slowness as meaning that FICWG bank members have no intention of responding. Please rest assured that we do plan to produce our Q&A list shortly.
Finally, I have to say that the motives you ascribe to FICWG members are very far removed from my own personal experience. Whilst I appreciate that you may see me as “compromised”, I do want to ensure that the record is straight in this forum: FICWG’s intentions are to promote open industry standards, and we make no apologies for wanting to work with organisations, such as FPL, who also share this goal.
My friends in the FIX community,
Twenty-two days have passed with no further attempt to answer my questions concerning this “consortium.” At this point it is fair to assume that truthful answers are damning and will not be forthcoming.
Clearly this so-called consortium is attempting to hijack the FIX Protocol for its own purposes and in a manner that is contrary to the strategic interests of many FPL members, contributors, and users. Unless this effort is stopped, the consortium will succeed in promulgating as “best practices” a protocol implementation that perpetuates an anticompetitive, bifurcated market structure in which dealers trade with one another anonymously through inter-dealer brokers and the great mass of the market may only trade with dealers. The inter-dealer brokers are to be kept in their stalls and blocked from offering their exchange facilities to the broader market. Similarly, the ECNs are to be confined to order-routing functions, with only selected dealers as destinations. The strawman document released yesterday makes this perfectly clear. Obviously it has been developed over many months, not openly but in secret.
Why investment companies would go along with this scheme is beyond me. I can appreciate that some of them rely on consortium members for product distribution and thus are beholden to them. I can only assume that the others are too distracted to realize how their interests are harmed. Clearly the consulting firms who have contributed to FIX over the years are compromised.
This is a watershed moment for FIX. If members and contributors do not hold the GSC to account now, they will have acceded to a hijacking of the protocol for nefarious purposes. There will not have been a debate. Critics will have been silenced.
Trust me when I say that most of you know less about FPL’s governance structure than you think you know, or should know. FPL does not own FIX, as is widely believed. Rather, an offshore trust owns FPL, and FIX, and all FIX-related entities are controlled through an impossibly complex, opaque, dense arrangement of dubious benefit to the market at large. The FIX Protocol is not like open-source software. Nothing prevents FPL from restricting access to or use of the protocol in the future, or from erecting high pay-walls to its use. Those of us who thought we were contributing our ideas and efforts to something that will be open and free forever are sadly mistaken.
It is time for the GSC to be forthcoming about this initiative and the future of FIX, and to open the process underlying this initiative to public scrutiny and comment. Attempting to hide the truth will not work.
Sincerely,
John HarrisJohn
I think Lisa has answered some of your questions, and I will compile a list of Q&As to address as many of your remaining questions as possible.
We will get to this in the next few days/weeks.
In the meantime, please note that the aim of the FI Connectivity Working Group of banks is to accelerate the adoption of a consistent set of FIX standards for trading fixed income products by actively promoting the benefits of FIX, and participation in this FPL initiative.
We think there is huge benefit to the entire industry in promoting such open industry standards (we articulated the benefits in our press release).
Thank you, Lisa. My questions for Sasson remain, but I appreciate this additional information you provided regarding process.
Of course, FIX users regularly find deficiencies in the protocol and work within FPL’s existing structures and facilities to remedy those. You and I, for example, collaborated on the fixed income gap analysis that led in part to the promulgation of FIX 4.4.
I wonder why these banks deemed these long established procedures inadequate in this case? Why didn’t they, for example, request the establishment of a working group under FPL’s auspices and hash out openly what they see as the gaps?
John,
FPL’s Global Fixed Income Technical Sub-committee will be working with Sassan and the banks that has retained his company to document the best practices for using FIX for fixed income trading, starting with CDS/IRS and eventually cash products as well. The work will be done under the guidance of the GFITech sub-committee. The banks requirements will be reviewed and determine how FIX will be used to meet those requirements. Any gaps identified as part of this best practices documentation will be submitted to the Global Technical Committee. Any firm that is an FPL member can participate in this initiative, not just the banks mentioned in the press release.
Lisa
Thank you for the links and kind offer to provide additional explanation in this forum. Some immediate questions do come to mind, based on the information you provided.
The FPL press release refers to “a consortium of 12 leading investment banks.” Your press release of 31 May 2011 refers to a “Fixed Income Connectivity Working Group,” naming ten of its members but stating there are others.
Who are the two firms that account for the difference between the twelve cited in the FPL press release and ten cited in yours?
Why were these two not named in your press release?
Are there others beside these ten or twelve (whichever the case may be)?
What is the legal nature of the relationship among these firms? Have they formed a corporate body of some sort? If so, what is its name and where is it domiciled? If not, are they operating under a memorandum of understanding or similarly-styled agreement?
When you say that your “consultancy has been retained by this group of banks to facilitate their initiative,” do you mean they engaged you severally or jointly, through a corporate body?
In your press release you draw a distinction between the “Working Group” as a whole and a smaller body representing “[a] majority of the Working Group members…also sponsoring the development of an enhanced FIX specification and domain model that is intended to form the basis of an updated open industry standard for fixed income.”
Who are the members of this smaller group and why have they diverged in their efforts from the larger group?
What is the meaning of the term “domain model?”
Your press release states that “[t]he Working Group will also liaise with industry and standards organisations in order to migrate the governance for the new specifications to the appropriate standards bodies as quickly as possible.”
I infer from this statement that these new specifications are being developed outside of either (a) existing standards bodies or (b) a new standards body that will ultimately hold them - otherwise, there would be no need for migration. Is my inference correct? If not, would you please clarify the forum in which these new standards are being developed? Who owns them?
Going back to that subset of your “Working Group” that you describe as a majority of its members, if it is developing an “enhanced FIX Specification” as you say, as a legal matter, if you know, how can it do so outside of the auspices of FPL? Doesn’t FPL’s parent own the FIX specifications?
The report by Chris Kentouris in Securities Technology Monitor attributes to you the assertion that “the group’s guidelines would be officially endorsed by FIX Protocol Limited, the trade group promoting the FIX standard, and the Financial products Markup Language group, the trade group promoting the use of FpML protocols in the over-the-counter derivatives market.” Is the reporter accurate in that regard? Has FPL already taken a decision to endorse the consortium’s guidelines?
The Trade News quotes you as follows: “‘There will be an explosion of electronic trading venues for fixed income in the derivatives space,’ said Sassan Danesh, managing partner at Etrading Software, a trading technology supplier. ‘To make connectivity to all of these venues cheaper for the big dealer banks, FIX standards will be developed. Short term this will only affect the derivatives market, but long-term this will move to the cash market.’” I know that reporters make mistakes sometimes. Does this quote accurately reflect your views, i.e., that FIX standards will be developed to make connectivity cheaper for big banks?
The report in The Trade News also states that “[i]nitially the group will target brokers’ adoption of FIX before moving on to work with asset managers.” Is that accurate?
According to The Trade News, “Some fixed income functionality was incorporated in FIX 4.2, 4.4 and 5.0 but Danesh says that this was primarily developed between the buy-side and trading venues and even then it was not created in a uniform manner.” I wonder, again, if the reporter accurately characterized your remarks. The reason I ask is that it is indeed news to me that FIX’s fixed income functionality was primarily developed between the buy-side and trading venues and that it was not created in a uniform manner.
Thank you for your help with these questions, Sassan.
My consultancy has been retained by this group of banks to facilitate their initiative, and we put out a press release on the intiative recently.
One of the reasons for the paucity of information is the purely practical matter of getting so many banks’ PR teams to sign-off on any communique that has their name on it, but hopefully the information below will provide the FPL community with some info.
Happy to explain more either here, or via direct email.
Finextra:
Banks push FIX for fixed income tradingSecurities Tech Monitor:
http://www.securitiestechnologymonitor.com/news/swaps-fix-protocol-recommended-28057-1.htmlThe Trade News:
http://www.thetradenews.com/operations-technology/6264FPL issued a press release today announcing its support for an industry initiative to accelerate FIX adoption for fixed income.
The press release refers to a “decision by a consortium of 12 leading investment banks to jointly engage with existing and emerging fixed income market venues and ISVs to promote increased use of the FIX Protocol and other open standards such as FpML, across the trading life cycle of all fixed-income products,” but neglected to identify the consortium, its twelve members, and other information that would normally be in a press release announcing an agreement between two entities.
What is the name of the consortium and who are its members? Where is it based and what is its charter or purposes? Who leads it? Does it have a website?
An innocent oversight I’m sure, but respectfully suggest these details should have been in the press release. Hopefully someone can supply them here.