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What Standards Can Do For You FIA IT Standards Working Group December 10, 2002. Panel Members. John Munro SVP Product Design, Rolfe and Nolan Chairman, FIA IT Standards Working Group Angela Krug VP Deutsche Bank New York U.S. Regional Manager, F & O Technology

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panel members
Panel Members
  • John Munro SVP Product Design, Rolfe and Nolan

Chairman, FIA IT Standards Working Group

  • Angela Krug VP Deutsche Bank New York

U.S. Regional Manager, F & O Technology

Vice Chairman, FIA IT Standards Working Group

  • Jim Northey Chairman, Fix Global Derivatives Committee
  • Tom McCabe Vice President, Floor Operations, CBOT
  • Chris Bennett Senior Vice President-Technology and Data Products, CBOT
  • Chris Toczycki Director, Information Technology, BOTCC
  • Mark Baumgardner Vice President of Business Development, OCC
  • Ed Gogol Systems Development Director, CME
  • Matt Simpson Senior Systems Analyst, CME
fia it standards working group
FIA IT Standards Working Group
  • Formed in June of 2002
  • Membership
    • 7 U.S. exchanges & clearing houses
    • FCMs
    • Vendors
    • Standards Group
  • Mission: review exchange-back office links for standardization potential
  • Not:
    • Order entry & confirmation – already moving to FIX
    • Communications methodologies
technical development post trade processing
Technical Development – Post-Trade Processing
  • Punched cards
  • Tapes, diskettes
  • Transmission
    • BSCA, RJE - fixed record length
    • LU 6.2 - expanded record length
    • MQM - variable length messages w/ fixed blocks
  • What next?
current status of interfaces
Current Status of Interfaces
  • Survey - all U.S. F & O exchanges & OCC
  • Of the 12 different interfaces for trades/management, the only commonalities were:
    • SPAN for all except OCC
    • 3 exchanges using TREX
    • 3 exchanges using FIX variants for order entry
    • 2 exchanges using a common Large Trader format
  • In the last year and a half:
    • NYBOT - TIPS format change
    • NYMEX – negative prices and strikes
    • BOTCC – GAPI changes

Security Futures

    • CME – TREX, trade register changes
    • NqLX trade feed
    • OCC - Trade files and GPA’s
    • SIAC – Large trader
slide6
Flat files
    • Raw data that must be formatted at either end
    • Changes must be made simultaneously at both ends
    • Can only be read by programs
    • Typically fixed-length : the punched-card legacy

*...+....1....+....2....+....3....+....4....+....5....+....6....+....7....+

TRX 12140200 0184A12000032016 123 1ED 20020900

TRX 15015400 0184A12000030316 123 1ED 20020900

TRX 15101000 0184A12000030316 123 1ED 20020900

TRX 17120900 0184A12000030916 996 1ED 20080300C00009500

TRX 17135000 0184A12000031016 996 2NK 20070400C00140000

1 01171800F252017 0338A32002083001 252 L T 117 20020900 00000000

1 01171900F252017 0338A32002083001 252 L T 117 20020900 00000000

1 01381800F252017 0438A32002083001 252 M T D 217 20020900 00000000

1 01381800F252017 0438A32002083001 252 M T D 117 20020900 00000000

GSA101381900F252017 0333A32002083001 252 M T D 217 20020900 00000000

GAC101381900F252017 0360A32002083001 252 M T D 117 20020900 00000000

slide7
Data base files
    • Format is defined within a database
    • Can be read by another data base or a program
    • Can be read by SQL or Query utilities over the data base
    • Lacks portability to another data base

....+....1....+....2....+....3....+....4....+....5....+....6....+....7....

TMSGID TMSGVR TMSGTM TUSRID TMSGLN TACTCD TTRDRT TTRDDT

TRX 12,140,200 184 A 1 20000320

TRX 15,015,400 184 A 1 20000303

TRX 15,101,000 184 A 1 20000303

TRX 17,120,900 184 A 1 20000309

TRX 17,135,000 184 A 1 20000310

1 1,171,800 F252017 338 A 3 20020830

1 1,171,900 F252017 338 A 3 20020830

1 1,381,800 F252017 438 A 3 20020830

1 1,381,800 F252017 438 A 3 20020830

GSA 1 1,381,900 F252017 333 A 3 20020830

GAC 1 1,381,900 F252017 360 A 3 20020830

slide8
XML files
    • Flexible format
    • Data and its definition included in the same place
    • DTD’s or schemas used to define the data and edit it on transmission or reception
    • Portability across platforms

<Instrument>

<Symbol/>

<Product Value=‘1’/>

<SecurityID>ED</SecurityID>

<MaturityDate>2002-12</MaturityDate>

<CFICode>OCAXXS</CFICode>

<SecurityExchange>XCME</SecurityExchange>

<StrikePrice>92</StrikePrice>

<InstrumentLegList>

<InstrumentLegGroup>

<InstrumentLeg>

today s challenges
Today’s Challenges
  • Record increases in volume
  • Many changes in the industry
  • Supporting open outcry and electronic trading
  • Need for more efficient and competitive business practices
why standards
Why Standards?
  • Standards will enable our industry to grow and respond to change while controlling costs.
maintaining the status quo
Maintaining the Status Quo
  • Costly
    • Increased support costs for multiple formats
    • Many additional components needed between systems
    • Cost to run the business are high and growth opportunities suffer
  • Lack of Competitive Advantages
    • Changes in data or functionality require significant time for analysis, design, programming, testing and delivery
    • Speed and quality of information limited by translation components between disparate systems
    • Limited technology options
maintaining the status quo15
Maintaining the Status Quo
  • Barriers to Integration
    • Current messaging technologies are not common across the financial industry
    • No common technologies used between trading, post trade and client processes
    • Limited resources and tools
  • The Future?
    • Current messaging technologies have reached their functionality limits
    • Costs are high to build and maintain outdated technologies so new initiatives may fail
the benefits of standards
The Benefits of Standards
  • Savings
    • Reduction of support and new development costs associated with multiple formats
    • Scalability and reuse increase
    • More options available in the industry
  • Competitive Edge
    • Ability to deliver more timely, accurate data
    • Shorter development, deployment and integration cycles
    • Increased ability to adopt advanced technologies and business practices
the benefits of standards19
The Benefits of Standards
  • Compatibility
    • Increased opportunity for integration across the financial industry
    • Better integration with internal and external systems
    • More technology options and industry knowledge
  • Opportunities for the Future
    • STP
    • New exchanges and products
    • Increase efficiency and productivity of existing resources
what is it going to take
What is it going to take?
  • Commitment to participate
  • Build knowledge/ Agree on standard
  • Provide interfaces that conform to the standard
  • Phased approach
  • Initial investment for long term gain
the value of standards21
The Value of Standards
  • Reduction of current costs
  • Respond to change
  • Growth while controlling costs