FIXML: Financial Information Exchange Markup Language
Focus: Securities Transactions
DTD or Schema: DTDs available here.
Website: http://www.fixprotocol.org/
Contact: scott_atwell@americancentury.com; andrew.broome@gs.com; or peter.white@gs.com
Founding & Key Members:
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American Century
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Credit Suisse First Boston/DLJ
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Fidelity Capital Markets
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Fidelity FMR
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Foreign & Colonial Management
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Goldman Sachs
- Merrill Lynch
- Morgan Stanley
- Putnam Investments
- Salomon Smith Barney
- State Street Global Advisors
- UBS Warburg
Organization: The FIXML effort is directed by the FIX organization. FIX has a Global Steering Committee and Technical Subcommittee, which sponsor working groups to address specific business or implementation related issues. The Global Steering Committee has four regional steering committees: United States, European, Japanese, and Asia/Pacific.
Background: FIXML was devised in 1998 by FIX Protocol Ltd., the company responsible for the Financial Information Exchange (FIX) electronic communications protocol, as an XML vocabulary based on the FIX protocol. Its aim is to continue FIX’s goal of improving the global trading process by facilitating the exchange of real-time securities transactions.
In July 2001, the organization announced plans to team up with the Society for Worldwide Interbank Financial Telecommunications (Swift), which had been working on its own SwiftML initiative. The collaboration centers around plans to converge their messaging protocols to create an XML-based version of the ISO 15022 protocol for securities message types, which is being developed by the International Standards Organization (ISO) Working Group 10.
The resultant ISO 15022 XML is to leverage FIX Protocol’s expertise in the pre-trade/trade execution domain, and Swift’s post-trade domain expertise to bring together different parts of the trade life cycle and work through issues “hindering straight-through-processing” (STP).
FIXML had been developed as an extension of the FIX protocol. It takes a FIX tag value format and represents it in XML. These FIXML messages are then embedded within the traditional FIX headers and trailers. By doing so, it minimizes the impact on existing implementations of FIX, requiring just an XML parser for an existing FIX engine to communicate.
This approach has, however, received some criticism from the industry, which believes that FIXML is merely an XML representation of the FIX protocol that doesn’t take full advantage of the capabilities of XML.
It also originally meant that while FIXML defined the application data, it had no mode of transport, as it was tied to the FIX session. The organization has since decided to separate the two layers and is creating a new FIXML session.
While FIXML’s messages are bigger than FIX’s, and therefore require more bandwidth, there are several advantages over the traditional protocol. FIXML’s more structured language format makes it easier for validation to occur, whereas with FIX, each trade counterparty has to interpret the specification, which can lead to errors.
Using XML also allows the addition of further functionality to the FIX protocol without causing more version fragmentation. This is important to the future of FIX to enable it to deal with competing demands for new functionality, products, and geographic regional support. It will also help with straight through processing by allowing users to pass some fields directly through to downstream systems.
FIXML has been implemented in some areas, including Merrill Lynch’s Corporate and Institutional Client Group’s e-commerce effort Direct Markets. Here, FIXML is being used for US cash equities to support trading and execution. In this case, Merrill Lynch separated the content and session layer by using FIXML over HTTP.
Reuters’ Instinet, however, decided not to use FIXML for its fixed income platform, and the New York Stock Exchange also opted to move away from FIXML and look at a wider application of XML.
While FIX has been compared with OFX, which has its own XML initiative (see links below), OFX is focused heavily on the retail market, while FIX targets institutional business.
FIXML also has similarities with the Straight Through Processing Markup Language (STPML) initiative. It is currently looking at ways to integrate STPML message sets into the FIXML standard.