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FIX Protocol Tool Kit Lunch and Learn

FIX Protocol Tool Kit Lunch and Learn. e-Commerce in the Fixed Income Markets. The Bond Market Association 2005 Electronic Trading Survey Summary. Background . The Bond Market Association has conducted the survey every year since 1997

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FIX Protocol Tool Kit Lunch and Learn

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  1. FIX Protocol Tool Kit Lunch and Learn

  2. e-Commerce in the Fixed Income Markets The Bond Market Association 2005 Electronic Trading Survey Summary

  3. Background • The Bond Market Association has conducted the survey every year since 1997 • 54 organizations participated in this year’s survey; some operate more than 1 platform • Survey focus • Who the platforms are and who they trade with • Inter-dealer (29) • Multi-dealer to customer (19) • Single dealer to customer (22) • Methodology/technology used for price discovery and execution • Request For Quote - RFQ (26) • Order Driven (33) • Cross Matching (27) • Auction (11)

  4. Electronic Trading Leads to Price Transparency • Most platforms allow participants to see executed prices • Many platforms make prices available to non-trade participants and data vendors • Over 3 in 4 publish executable quotations • Request For Quote method widely used in multi-dealer to customer platforms, enable investors to see multiple executable or indicative quotes at the same time on a single screen • Some platforms enable customers to see prices from third party sources such as MSRB and TRACE

  5. How Many Platform Participants • First year the question was asked • Of those who responded, answers varied • The largest platform reported 7,600 investors • Four reported >1,000 • Five reported 500-1,000 • Seventeen reported more than 100 registered institutional investors • Liquidity providers • 32 had dedicated providers • Eight had more than 25 • Average of 14 among those with less than 25

  6. Platform Volume Metrics • Average trade size ranged from $25,000 to $15 million • The Bond Market Association estimate: daily cash market trading volume average: $750 billion in U.S. and Europe • Growing volume • 48 reported volume change in 2005 from 2004 • 35 reported increases • 14 reported at least a 20% increase • 4 between 10% -20% increase

  7. Clearance and Settlement Services • Most (29 of 54) provide direct access to trade settlement • Reported links to a number of trade clearance and settlement services including • DTCC, NSCC, GSCC, Euroclear, Eurostream and Bloomberg

  8. Who are FIX Compliant • FIX Version 4.4 came out in 2003 following extensive collaboration of Bond Market Association members, platform vendors and Fix Protocol Association members • 17 indicated they were FIX 4.4 compliant • Survey asked about the future; leading themes included: • Further 4.4 adoption • Refinement of Application Program Interface • “Connectivity hubs” for communication among market participants and trading systems

  9. Electronic Trading Platforms and FIX Protocol

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