Capgemini Financial Dips Into FIX Testing Waters
June 1, 2009
Capgemini Financial Services has released a system for automating the testing of tags and messages in trading data formatted in the Financial Information eXchange ("FIX") protocol, to ensure that counterparties can exchange standardized data to successfully execute trades.
Capgemini's release of its FIX Protocol Testing Accelerator, revives a long-dormant initiative in the securities industry that aims at standardizing the global flow of trade information.
The accelerator is designed to overcome several failed attempts to solve a fundamental problem nagging broker-dealers: making sure fixed-income trade data sent in the FIX protocol can be read accurately by and acted on quickly by counterparties.
Past attempts at certifying the contents of such FIX messages have involved manual processing.
"The traditional approach would be to carry out the tests over the phone and using paper test scripts that would have to be updated," to reflect whether or not connectivity had been successfully established, said Murat Asku, practice head of testing for capital markets at Capgeminis's financial services business group. "Our approach involves updating digital models of tags and messages of all the major asset classes."
The Capgemini accelerator, developed in conjunction with Hewlett Packard, Blueprint Systems and Aegisoft, streamlines the updating process and stabilizes the changes being introduced. The way messages are tested and what they're tested against also are standardized, reducing strain on quality assurance and IT departments.
With this initiative, not only would standardized FIX tags and messages be certified, but user-defined tags and messages as well.
FIX Protocol Ltd., an industry consortium made up of buy-side, sell-side, vendors and exchanges, first tackled certification of trading information ten years ago. That effort was focused on equities and led to creation of TradeAssure, a joint venture with SIAC, Hewlett Packard and the Open Group. The effort was abandoned and proprietary solutions for equities became so widespread, that FIX Protocol Ltd., assembled a group of vendors which included Aegisoft to come up with a standardized certification program for trade data used in fixed income securities. That effort was abandoned in 2006.
Capgemini also is starting with fixed income messages. A fixed income trade typically contains many more data tags than its equity counterpart.
Scott Atwell, co-chair of the global steering committee at FIX Protocol Ltd., was aware of the initative but had "not been involved" in it. But an individual affiliated with the Society for Worldwide Interbank Financial Telecommunication (SWIFT) said, "The core engine is all Aegis. They had the best core of the four vendors the last time around."
SWIFT, a member-owned cooperative that provides a communications network connecting more than 8,300 banks, securities firms and corporations, was one of the initial vendors to bid on FPL's request for proposals to develop FIX certification until it dropped out of the running in 2003.
"I don't want to say we're trying to replace what FIX Protocol Ltd. is doing for foreign exchange, futures and options or other asset classes, said Asku. "But we are saying that we took all the standardized tags and messages and captured them for you. You no longer have to do that on your own."
Asku indicated that this will reduce the expense and provide a repeatable process, a digital platform form that will shrink time to market without sacrificing the quality of the testing.
