What is FIX?
The Financial Information eXchange ("FIX") Protocol is a series of messaging specifications for the electronic communication of trade-related messages. It has been developed through the collaboration of banks, broker-dealers, exchanges, industry utilities and associations, institutional investors, and information technology providers from around the world. These market participants share a vision of a common, global language for the automated trading of financial instruments.

FIX is the industry-driven messaging standard that is changing the face of the global financial services sector, as firms use the protocol to transact in an electronic, transparent, cost efficient and timely manner. FIX is open and free, but it is not software. Rather, FIX is a specification around which software developers can create commercial or open-source software, as they see fit. As the market's leading trade-communications protocol, FIX is integral to many order management and trading systems. Yet, its power is unobtrusive, as users of these systems can benefit from FIX without knowing the language itself.

Background
Since its inception in 1992 as a bilateral communications framework for equity trading between Fidelity Investments and Salomon Brothers, FIX has become the de-facto messaging standard for pre-trade and trade communication globally within the Equity markets, and is now experiencing rapid expansion into the post-trade space, supporting Straight -Through- Processing (STP) from Indication-of-Interest (IOI) to Allocations and Confirmations. From this foundation, the protocol is gathering increased momentum, as it continues to expand across the Foreign Exchange, Fixed Income and Derivative markets.

The significant adoption of FIX within the financial services community was empirically highlighted by the FIX Global Survey which was conducted by TowerGroup at the end of last year. The results cited that 75% of buy-side and 80% of sell-side firms interviewed currently use FIX for electronic trading, and that both groups plan to focus substantial efforts on expanding their FIX usage to over 93%, as well as leveraging FIX across additional asset classes by 2008. The survey also revealed that FIX is developing a key role within the post trade space, as over 80% of buy-side firms, and over 95% of sell-side firms surveyed currently support, or plan to support FIX for allocations.

Further to this, FIX is gaining increased attention within the exchanges community as over three quarters of all exchanges surveyed supported a FIX interface, with the majority handling over 25% of their total trading volume via FIX.

Organization
The success of the FIX Protocol is primarily due to the voluntary efforts of its member firms from the buy-side, sell-side, vendor and exchange communities who work together to help achieve the FIX Protocol Limited (FPL) mission statement, "To improve the global trading process by defining, managing and promoting an open protocol for real-time, electronic communication between industry participants, while complementing industry standards."

Technical and business professionals from the FPL member firms coordinate their activities and organize their work through a series of committees, subcommittees, and working groups, all overseen by a Global Steering Committee that aims to ensure consistency of protocol application as it is extended into new markets, asset classes, and phases of the trade lifecycle. In addition to rigorous engineering and technical efforts undertaken to ensure the ongoing applicability of the protocol to financial-market systems, the FIX Protocol benefits from an energetic educational and marketing effort that seeks to keep the specification viable, relevant, and responsive to the needs of market participants.

Usage
No one knows with certainty how many people use FIX or how much of the global volume of securities transactions is effected via the FIX Protocol. What is certain is that 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.

Both "adopters" - users of the FIX Protocol - and vendors of FIX-related technologies use the FPL website to inform the marketplace of their FIX capabilities and capacities. If you want to know whether your counterparties offer FIX communications capabilities, just ask them. If you want to learn more about FIX or how to implement FIX connectivity for your business, send a message to a member of FPL's Global Education & Marketing Committee, or to the FPL Program Office.

Costs
While the FIX specification is open and free, implementing FIX requires planning, software, and network services, if not other goods and services. For some organizations, obtaining and maintaining productive FIX connectivity can be a relatively inexpensive process, measured in a few thousand dollars of start-up expenses and a few hundred dollars of recurring charges. At the opposite end of the spectrum, creating a large-scale, continuously-operating FIX network serving tens of thousands of users can easily be a multi-million-dollar proposition. The best place to start your due diligence is the FIX Implementation Guide. Dozens of top FIX experts have volunteered their time to create a guide that is useful at the business and technical level. Investing even an hour reviewing the guide will help you understand the type of planning and resources required to implement FIX in a way that helps your business.

What is FIX Protocol Limited?
FIX Protocol Limited (FPL) is the non-profit industry association that is responsible for defining, managing and promoting increased usage of FIX as an enabler for electronic trading. This benefits the industry by facilitating greater transparency, straight-through-processing and cost savings.

Since its inception the FIX Protocol has developed significantly and its history represents one of our industry's truly unique success stories. FIX is now the de facto messaging standard for the electronic communication of equity trades and is developing momentum within the derivatives, fixed income, and foreign exchange markets. However, its potential to further improve the trading process and provide new capabilities for all industry participants is limitless.

Technical and business professionals from FPL member firms coordinate their activities and organize their work through a series of committees, subcommittees, and working groups, all overseen by a Global Steering Committee. This committee aims to ensure consistency of protocol application as it is extended into new markets, asset classes, and phases of the trade lifecycle. In addition to the rigorous engineering and technical efforts undertaken to ensure the ongoing applicability of the protocol to financial-market systems, the FIX Protocol benefits from an energetic educational and marketing effort that seeks to keep the specification viable, relevant, and responsive to the needs of market participants.

Why was FPL established?
The origins of the FIX Protocol date back to the early 1990s with its history representing one of the truly unique success stories within the financial services industry. FIX began, and continues today, to be defined, managed, and promoted through the collaboration of volunteers who also use the protocol. In 1998, these collaborating firms established FIX Protocol Limited (FPL), a not-for-profit organization, to promote adoption of the protocol. Establishing a legal entity provided the ability to collect membership dues and to contract and fund services key to managing and expanding the use of FIX, such as developing and hosting the FIX website.

In today's environment, FPL plays an even greater role with respect to intellectual property and other concerns. Member firms have also realized that being solely dependent upon volunteers can be limiting and often results in an inequitable distribution of work. As a result, FPL has taken steps over the past several years to engage service providers to help supplement the efforts of volunteers, to expand the scope of what FPL is able to accomplish, and to support the operational aspects of the organization. FPL has been able to increase its capability to fund projects and services. FPL's membership base has more than quadrupled since it began its membership expansion effort in 2002. FPL now benefits from a membership that spans the financial services sector and includes Buy-side and Sell-side firms, Exchanges/ECNs and Vendors of FIX based products and services. The financial support provided by the membership enables FPL to:

•Engage service providers with the expertise to supplement volunteer efforts so that the work required to constantly develop FIX in response to industry requirements is possible

•Continuously promote the adoption and increased usage of electronic trading practices and the FIX Protocol within new sectors and regions globally through a range of educational initiatives

•Legally protect the intellectual property of the protocol so that the industry can confidently continue to use it as a free and open standard, while also enabling others to build and support commercial products and services based upon it

•Continue to develop the FPL website and its discussion forums, which enable over 50,000 registered users to access the latest specifications, FIX-related news and other information