The firms that perform FIX testing can be broadly slotted into one of the following six categories:
- Exchanges/ATSs that offer a FIX interface to their clients
- Buy-sides connecting by FIX to sell-sides
- Sell-sides connecting by FIX to buy-sides and to exchanges
- Industry utilities such FINRA Trace Spec for Corporates and Agencies
- Interdealer brokers
- Vendors such as Tradeweb, MarketAxess, Thinkfolio, ThomsonReuters
I always look at a FIX connection by asking a series of questions:
- Who directly pays for the physical connectivity?
- Does one side pay the other to conduct the testing and certification?
- Does either party view the connection as a profit centre?
- Does either party view the connection as a cost centre?
- Must either party implement the connection?
Does one side pay the other? Broker/dealer pays Exchange
Does one side pay the other? No
Does one side pay the other? Broker/dealer pays vendor
Exchanges perform such an important role within the market that one would expect them to take testing very seriously. Some exchanges do and have implemented vendor supplied testing technology such as:
I would note that the many exchanges that have publicly announced deals for vendor platforms are in frontier markets. Whether this is because established markets don't allow press releases but are indeed buying these solutions or because frontier markets are more likely to buy software to compensate for a lack of experienced available testing personnel is not clear.
This market sector has clearly been a sweet-spot for the adoption of FIX Testing and Certification software
I am not aware of any open source information available whereby a vendor has stated that an industry utility has bought their system.
I am not aware of any open source information available whereby a vendor has stated that an IDB has bought their system.
I do have private information about buy-sides, interdealer brokers and industry utilities that have purchased FIX Testing and Certification software but in keeping with the no-naming and shaming policy of this blog I will not mention names. A quick look around linkedin.com will assist in any research that a reader may care to conduct...
- Generic testing software such as HP Unified Functional Testing (the old QTP).
- Inhouse built software to test FIX
- Old fashioned spreadsheets, log files, screenshots
- Mini-FIX is an open source C++ Client/Server tool to assist with testing
A further challenge is that most folks buying these systems are doing so for the first time and so are not aware of the sweet spot for the products and the challenges for delivery.
In conclusion: Conduct a thorough search and selection for a FIX Testing and Certification platform. Implement it, manage the vendor relationship and don't start to try to save money by doing it manually.