Itiviti Automates FIX Connectivity Ahead of Possible "Connectivity Crunch"

Trading and technology provider Itiviti and Imandra, an AI company offering financial algorithms and its flagship automated reasoning engine, have partnered for enhancements to Itiviti’s FIX global connectivity platform, NYFIX, which offers market connectivity to the buy side, sell side and trading venues.

The partnership is very much a starting point, says Linda Middleditch, Itiviti’s chief product officer, as the firm plans to expand new AI capabilities across its services and other software solutions.

The two firms had been working on a proof-of-concept for some time. Initial enhancements will primarily focus on two areas: automating the migration of FIX rules—a process that happens when a financial institution switches its connectivity or order/execution management system (OEMS) provider—and the creation of a FIX certification pack, also part of the client onboarding process. The process is manual, requiring connectivity teams at separate firms to be aligned, and can drag through repeated testing for customized types of connections.

“You can somewhat control your side of the fence, but controlling the whole thing is not something that anyone has done,” Middleditch says. “Can you automate the migration of the rules from one platform to another? Can you automate the certification? Can you automate the total end-to-end task? The process is ripe for making more efficient.”

With the new release, Itiviti wants to offer a solution for banks that are upgrading their low-touch electronic trading environments. Goldman Sachs, for example, has announced it was to do just that in its 2019 Q1 and Q2 earnings reports. The vendor is also seeking to wrangle the 150 users of Bloomberg’s Sell-Side Execution and Order Management System (SSEOMS) as the data vendor shutters the business line, as well as Fidessa clients, ahead of what Middleditch and Itiviti CEO Rob Mackay are calling a possible “connectivity crunch.”

A connectivity crunch could happen if, say, brokers A, B and C all change over their systems at once, and have to ask every one of their clients to redo the FIX connection with them. This process can take a week or two, and could result in a build-up of clients. If this scenario were to occur, it likely wouldn’t until SSEOMS fully shuts down next year.

To date, Itiviti has signed more than a dozen SSEOMS replacements, and has migrated connectivity or low-touch trading for more than 20 Fidessa customers.

“We anticipate a steady exodus of Fidessa customers through 2020 and 2021,” Mackay says. “We expect most SSEOMS customers to make decisions about their future OMS during Q1 of 2020, with the last decisions made by end-Q2.”