The encyclopedia · Trading & Investing · Technical decision · 1992–1998
Fidelity and Salomon's FIX protocol became trading's open message standard
Two rival trading firms published one simple text protocol in 1995; by 1998 electronic trading had adopted it as the industry default.
FIX Trading Community · Fidelity Investments · Salomon Brothers
the move
In 1992 equity trading still ran largely over the telephone and through proprietary point-to-point electronic links. Fidelity Investments, one of the world's largest asset managers, and Salomon Brothers, Wall Street's most profitable firm of the era, started a project to exchange equity order data electronically; developers Robert Lamoureux and Chris Morstatt built what was first known as the 'Salomon Brothers exchange'.
The protocol was deliberately simple, open and vendor-neutral: human-readable tag=value messages carried over standard internet protocols, so any firm could implement it without licensing anything. The original developers encouraged industry-wide collaboration and consensus-driven improvement, and in 1995 the first public version, FIX 2.7, was released as an industry standard.
Because no single company owned it, FIX spread across the buy side, sell side, exchanges and ECNs, moving from equities into straight-through processing and new asset classes. Today an independent, non-profit standards body, the FIX Trading Community, maintains it as the global de facto standard for pre-trade and execution messaging.
why it works
- Simple text messages meant any firm could implement FIX without a proprietary library.
- Publishing it openly let rivals adopt one wire format instead of negotiating bilateral links.
- Vendor-neutral governance removed the fear that one bank would control the plumbing.
- Human-readable messages made debugging and compliance easier than binary protocols.
what transfers
A standard wins when the first movers give it away: open, simple and vendor-neutral beats proprietary, even when the authors are rivals.
what came after
FIX 2.7 grew into FIX 4.x and 5.0, which split the session layer into FIXT and added FAST and SBE encodings for low-latency market-data feeds. The protocol now covers the full trade lifecycle from pre-trade through execution to settlement, remains free and open, and is developed by an industry nonprofit whose members span banks, brokers, exchanges and technology vendors.
references
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