These results demonstrate Australia is moving into line with the established FIX markets of the US and Europe, which have been trading non-equities asset classes for several years. In addition to expansion of asset classes traded electronically the FIX functions used have also expanded. In 2008 basic order flow was the end game for FIX users. In 2010 FIX functions used has expanded to include Indications of Interest (IOIs), program trading, and post-trade features such as allocations and confirmations/ affirmations. Cost and risk Reduction are still the top two priorities Consistent with the response from the 2008 survey, the 2010 survey respondents named cost control through operational efficiencies and risk reduction as the top two business benefits of FIX electronic trading. Although cost reduction and risk reduction are the fundamental benefits of FIX, there are enhanced and additional benefits gained as the number of asset classes traded electronically increases and the range of FIX functions extends to post trade messages. The use of FIX for allocations, for example, further extends electronic automation of the trade cycle eliminating the inefficiency and risk associated with manual allocations. The business case for FIX does not always stack up, however.

For certain investment managers, including domestic-only and those with low trading volumes, the business case for FIX is less compelling. The top two reasons given by the nine respondents who do not currently use FIX and have no plans for its implementation are ‘other trading tools meet their needs’ and ‘trading volumes are too low to derive benefit’. Living in a FI Xed world? In addition to the significant FIX adoption by survey respondents, it is interesting to note the visible market indicators of the expansion of FIX: • ASIC has mandated the use of FIX as the reporting mechanism for short sales activities, requiring investment managers to acquire FIX capability to comply. • The FIX governing body, FPL, held its inaugural Australian FIX conference in 2009.

The Sydney event attracted over 280 attendees. The 2010 conference will be held in October. • Several specialist global FIX network vendors have recently entered the Australian market and have ramped up sales efforts to the buy-side. Next steps for FI X in Australia At a recent trading conference in the US, the discussion on “where next?” for FIX led to the general conclusion that investment managers should take advantage of existing FIX capability rather than investing in the move to the latest and greatest version of FIX (most users globally are on an older version of FIX). This sentiment is even more relevant to the Australian FIX market, given its relative maturity compared to the US. Australian investment managers will continue the expansion of FIX usage, asset classes traded, and functional coverage highlighted by Shoreline’s 2010 FIX survey. Increasing availability of managed FIX solutions and continued FIX education through events such as the FPL FIX conference will make the move to FIX easier. Mandated use of FIX for reporting by ASIC provides an incentive for Australian investment managers to embrace FIX.

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