Fixed Income Routing Engine

We Create Solutions for Fixed Income Electronic Security Trading Firms.

Fixed Income Routing Engine (FIRE™)

As competition in the marketplace increases and regulatory reporting times decrease, fixed income trading firms must automate and improve their efficiency or they will be left behind. Traders want to maximize exposure of fixed income offerings and bids across multiple distribution channels while maintaining the ability to execute instantaneously without the risk of overselling inventory. The operations staff wants trades to automatically flow through to the clearing vendor to meet reporting and compliance requirements. And, management wants to see increased trading volume and higher profits.

Responding to these challenges often requires integration and interaction between multiple computer systems – both internal and external to the firm. The solution to this fixed income electronic trading problem is our fixed income routing engine, FIRE™.

Primary uses of the FIRE™ server currently include:

  • Quote publication
  • Order execution
  • Reporting – Trade, Drop-copy, and Regulatory
  • Request for quote
  • Security master updates

Enterprise System Integration

Product Overview

The FIRE™ product includes a suite of system integration and routing solutions that address the interfacing requirements between trade order management systems, clearing vendors, and multiple fixed income Electronic Communication Networks (ECN’s), Alternative Trading Systems (ATS’s), and Interdealer Brokers (IDB’s).

FIRE™ uses the Financial Information Exchange (FIX) protocol messaging system to communicate from end to end throughout the system. Other messaging protocols or proprietary data formats that are used by connected systems are translated into or out of the FIX protocol as necessary. This allows the firm’s internal systems and external vendor systems to communicate freely. Connecting another vendor or system to the network merely requires the addition of a gateway module to convert the data flowing from that system into the FIX protocol that is used throughout the network.

Quote Publication & Order Execution

Traders may publish executable quotes from their internal trading system simultaneously across the major ATS platforms such as TMC Bonds, Tradeweb Direct, KCG BondPoint, and Bloomberg. This assures the broadest distribution of the bond bids and offerings as the users on each ATS receive the quotes simultaneously.

Example:

  1. A bid is received from one ATS.
  2. The FIRE™ server ensures that an updated offering quote for a reduced quantity is immediately sent to all ATS’s so that the position is not oversold.
  3. The system either executes the trade or delivers the bid to the trader’s desk for manual confirmation.

Trade Reporting

FIRE™ server offers straight-through processing (STP) capabilities which can streamline post-trade reporting of trades. Once the order is executed, the trade report is sent back to FIRE™ and routed to the clearing service or other system. This instantaneous processing assures that the firm can meet regulatory and compliance reporting requirements without any manual involvement of trading or operations staff.

A component of the FTLabs FIRE™ server, referred to as clearing gateway, is used to communicate with the clearing vendor. The clearing gateway converts the trade message to the proprietary communication protocol used by the firm’s clearing provider (for example, Pershing’s UTF format) and route to the clearing firm for processing. Acknowledgements and other alerts messages from the clearing provider are converted back to the FIX protocol and routed back to the trader for storage or processing locally.