FPL enhances execution reporting clarity in Europe
FIX Protocol Limited (FPL), the organisation responsible for
the FIX messaging standard, has published recommended trade reporting practices
to give buy-side firms more clarity on how brokers execute their orders.
The updated guidelines are based on work originally produced
in February 2011 by FPL’s Americas buy-side working group to address the need
for more consistency and greater transparency in execution reporting. The
guidelines have been revised and extended to include specific improvements for
firms trading on European equity markets.
The guidelines focus on requesting sell-side firms to tag completed
trades with specific details using FIX. The information should include which venue
the order was executed on, unique identification of each market – including
separation between lit and dark order books – whether the order was executed
passively or aggressively and whether the trades were executed on an agency or
firms want to know what brokers are doing with their orders, and where the
fills are coming from," Jim Kaye, co-chair of the FPL EMEA business
practices subcommittee and director, product development, European execution
services at Bank of America Merrill Lynch, told theTRADEnews.com. "There is a need for a single
standard to be able to read how sell-side firms executed the trades for their
clients. Our guidelines make suggestions that should help resolve that
that, prior to MiFID, market participants largely knew what would happen to
their orders, but the fragmentation of markets in recent years had made it more
difficult to understand the trading process. While buy-side firms had been
working bilaterally with brokers to solve the problem, working together as a
group was a far more efficient solution, he said.
buy-side members of FPL have expressed a clear appetite for greater clarity and
consistency in reporting from their brokers. Working with members in
different markets globally we have been able to update the guidelines so they
deliver even greater insight to the buy-side community,” added Brian
Lees, co-chair of the FPL buy-side execution venue working group and manager of
application development at The Capital Group Companies.