What is financial Information exchange(FIX) & its importance

Financial information exchange (FIX)

In this globalized world, economic activity including financial markets and interaction demanded a platform to communicate and interact on a real-time date basis. The Financial information exchange – FIX comes into an amazing play as a communications reform.

You know what? The most real-time exchange of financial information worldwide there was a need for an amazing communication system that is trader-neutral and could be used for different financial markets and then the financial information exchange protocol was created.

The users of the financial information exchange system are nearly 300 available companies worldwide.

What is financial Information exchange(FIX) & its importance

The Financial information exchange has become the in-effect messaging of a fantastic platform for trade, & pre-trade of the post-trade transmission methods. Financial information exchange is also used for the United State regulatory reporting process.

Financial information exchange system is easy to use, also it is more compatible with almost every generally used network technology worldwide. FIX protocol Ltd maintains the FIX communication system. The main aim of forming the FIX company was to fulfill the purpose of communication and that the company remains in the public domain.

Understanding the main concepts of FIX

The communication system of FIX includes:

  • Financial trade allocations, 
  • Texting, 
  • Trade advertising, 
  • Changes, 
  • Email, 
  • Trade news, 
  • Order submissions, and then execution of your trade financial data reporting.

Financial information exchange communication system is developed for business-to-business (B2B) communication, and it was developed for better business communication and transaction flow.

The Financial information exchange communication system mostly aims to contain overabundance and then it can reduce your available time spent on record keeping, telephonic communications, text messaging, etc. The major beneficiaries are funds, investment managers, and banks.

FIX system tries to provide a platform for accurate and up-to-date financial information which is the main concern of the traders through and across the financial exchange houses worldwide.

History of Financial information exchange

The Financial information exchange communication system was introduced in the year 1992 to facilitate each equity trading between a firm named Salomon Brothers and then the Fidelity Investments.

Before the Financial information exchange(FIX) implementation trade communication was handled mostly over the phone and then the record-keeping was done separately but after the FIX’s communication system implementation, everything changed from record keeping and communication to accountable transactions.

Why FIX is so important for financial markets?

Whether it is the buyer-side (companies or investors) as well as the seller-side(brokers-dealers,) of the financial markets, the FIX communication system is popular among both. All the components of the financial markets such as mutual funds, investment banks, brokers, stock and futures exchanges, etc benefit from the FIX communication system.

FIX messaging standards are maintained and continue to develop by the FIX trading community member firms. Several financial institutions around the globe are the main constituents of the FIX community. The FIX continues to evolve because of these firms that ensure the standards of 

FIX meets new and emerging trading requirements. FIX keeps pace with the ever-changing technology and financial markets. Members of the FIX community discuss current issues and challenges and incorporate changes in the FIX communication system accordingly.

Some of the major challenges are cybersecurity, digital currency, and blockchain, executing transparency, and improving performance. The FIX system is used for front office work and back-office work ‘society for worldwide interbank financial telecommunication SWIFT system is used.

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