Capital Market Operators Trek Lazily to FIX Software Upgrade

Stock brokering firms and investment banks in the country are lazily marching to adopt Financial Information Exchange (FIX) protocol software, even as the deadline for the completion has expired, Nigeria Communicationsweek has learnt.

The FIX Protocol is a free, open and non-proprietary messaging standard that was developed in 1992 by Fidelity Investments & Salomon Brothers to facilitate bilateral communications framework for equities trading.

Since its conception, its usage has significantly expanded in response to evolving industry needs and today it is the predominant messaging standard for pre-trade and trade communication globally within the equity markets.

FIX has metamorphosed many times over in a bid to satisfy investor taste complexities. With growing local supports now expanding, the Nigeria space will leapfrog from local support vendors’ investments in FIX to ensure the proposed FIX platforms succeed. 

Amos Emmanuel, chief executive officer, Programos Software Limited- a major player in the capital market space, said that the market is already due to commence the use of the FIX OMS technology as some stockbroking firms are already at different certification stages on the process using their recommended infrastructure.

“Virtually every major stock exchange and investment bank uses FIX for electronic trading, as do the world’s largest mutual funds and money Managers and thousands of smaller investment firms. Leading futures exchanges offer FIX connections and major bond dealers either have or are implementing them.”

He added that: “Though challenges ranging from power, infrastructure, regulatory may impede smooth take off, many organizations have complied by acquiring the required software and communication technologies adequate for the FIX implementation. The good signs include that investor confidence will return to most implementing turbulent markets who may have previously experienced painful recessions, and that market transparency will improved tremendously.”

“The bad signs are that it may take players more time to tinker most efficient ways to optimize the benefits of the FIX Protocol for the advancement of the economic developments in line with the overall post-2015 sustainable development goals (SDGs); and that fresh government policies will cause a shift in the intense interest of operators to adopt the beautiful global technological introductions of the Fix Trading Community not-for-profit organization

Yele Okeremi, chief executive officer, Precise Financial Systems, said that the mandate to adopt the global standard of FIX protocol is a step in the right direction as it will allow indigenous software providers in the capital market to compete with foreign providers and as well give the local operators more opportunity to play on a global level.

He however, cautioned against some stock broking firm using the mandate to show preference for foreign software against the local ones. He noted that it is security risk to allow foreigners control the country financial data now that they have taken control of our national data in the National Identity card scheme.

The software expert, urged capital market software providers to be intelligent and scale up their product to meet the adopted FIX protocol in order to consolidate their dominance in the capital market space.

Nigeria CommunicationsWeek investigations also revealed that Security and Exchange Commission’s (SEC) mandate to stock broking firms to recapitalize to the tune of N300million by the end of December this year has also affected the effort of broking firms to upgrade to FIX protocol.