Sunday, August 13, 2006

After the Trade is Made - Perspectives @ FIA Roundtable

Some thoughts on back office automation (and other post-trade topics) in the latest issue of FI......

Several broker representatives who participated in the roundtable asked if the endusers would welcome a move towards the use of FIXML as a standard message format. The cost-benefit was not clear to all end users. One end user warned that moving to FIX was a big burden in cost terms for both end-users and brokers. The initial cost of a full FIX implementation is so high—he estimated $500,000—that many users are balking.

Still another end-user commented that his firm relies on direct connections to the exchanges. "I don't care how the data comes in from the firms," he said. The more critical issue for his firm, he added, is getting an intraday rack. "We can't reconcile intraday in back-office clearing."