Industry viewpoint : FIX Trading Community

FIX EMEA TRADING CONFERENCE.

A look at what we learned from this year’s unique virtual event.

Little did we know that 2020 would be a year of disruption impacting industries across almost every sector. 2020 was also due to be the 12th year of the EMEA Trading Conference now established as Europe’s largest one day trading conference. The original in-person conference was postponed from March to September due to the rise of the Covid-19 pandemic and at the time few thought that 6 months later we would still be unable to run an in-person conference. However with challenge comes opportunity and adapting to a new virtual conferencing platform allowed the FIX Trading Community to deliver a unique event that offered two conference streams with one being hosted from a live TV studio in the London Science Museum. The virtual format also allowed for participants to drop into the sponsors virtual booths to experience product demonstrations, chat with the company representatives and network with colleagues and peers. The FIX Protocol stand also hosted several drop-in sessions where delegates could ask questions to a series of FIX experts. This event was the first of its kind and delivered on all aspects, providing delegates with an informative, interactive day addressing relevant industry issues and the educational content attendees are accustomed to.

The FIX EMEA Trading Conference, created by the industry for the industry, focused on delivering high quality content by subject matter experts with more than 1,000 virtual participants attending on the day representing buy sides, sell sides, venues, exchanges, trade associations, regulators and policymakers participating across global jurisdictions. The unique delivery enabled global participation resulting in an increase of attendance from other regions such as 14% from the US, and 4% from Asia Pacific.

Key takeaways from the conference
A consensus that resonated through many panels was how the Global Capital Markets have successfully reacted to the Covid-19 pandemic. A seamless switch to working from home was challenged by liquidity in the secondary markets being severely stress tested. It was acknowledged that this pandemic was not simply a replay of the Global Financial Crisis of 2008 since it was a global health crisis not a financial structure issue. The fiscal and monetary responses and banking system’s ability to lend have assisted the community and prevented a full-blown financial crisis. The next challenge is to address how the market infrastructure continues to operate in the long-term, considering the controls, surveillance, security issues, and not forgetting the bandwidth issues of working from home.

Industry engagement and collaborating together to make the financial community more connected remains a focus. Further regulation is guaranteed although work from home and Brexit factors must be considered. It would be beneficial if regulators across the globe worked together to address better ways to streamline reporting obligations and reduce the possibility of duplicate data. Greater transparency and operational efficiencies were an overarching theme that ran through many of the sessions with these topics aligning perfectly with the ethos of the FIX Trading Community.

Making a European Consolidated Tape work for the industry has been on the regulatory agenda for a significant number of years. The FIX Consolidated Tape working groups have been involved in identifying the data standards required to create an effective consolidated tape. The Equities group has worked towards the definition between addressable and non-addressable liquidity and Market Model Typology (MMT) for post trade reporting.

The need for improving technology and automation for Fixed Income continues. During the height of the pandemic, access to liquidity even on most liquid instruments was difficult. When markets are under stress, trading larger blocks becomes even more challenging. The quality of data and the need for a consistency in post trade Fixed Income reporting was a recurring theme. The FIX working groups, Fixed Income Consolidated Tape and the Fixed Income Business Practices, continue to work on identifying how to improve data transparency.

For more details on the work of both the Equities and Fixed Income Consolidated Tape working group and how you can get involved, contact fix@fixtrading.org.
ESG is NO longer a Fringe Concept” – Investment decisions are based on data, but at this time there is inconsistent data related to ESG for an end investor to have a true understanding of the ESG credentials of the company they are investing in. ESG data is hard to track qualitative data with inconsistent definitions and opaque benchmarking of corporations. The data is in reports, news articles, disclosures, company websites etc. but is hard to extract and the ratings are usually a score with minimal supporting data. The panel talked about greenwashing and discussed examples of firms mispresenting ESG credentials.

The FIX Trading Community ESG working Group will address the need for market participants to collaborate effectively and build a framework of guidelines around the necessary reference data and to enable compliance through the availability of relevant FIX flags. Contact fix@fixtrading.org for more information and to join the working group.

The panel “Introducing FIX Next Gen” focused on FIX initiatives to bring the next generation of volunteers into the FIX Trading Community. This year sees the introduction of a FIX Membership mentoring scheme. A number of senior industry participants have volunteered to be mentors, so if you are Next Gen or a potential mentor please get involved.

If you did not make the FIX virtual event you can catch up on some of the sessions on the FIX Trading Community YouTube channel.

©BestExecution 2020

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