SEC intervenes for operators to achieve FIX OMS software upgrade

Securities and Exchange Commission (SEC) has unveiled an intervention fund aimed at assisting stock brokering firms and investment banks to upgrade to Financial Information Exchange (FIX) protocol software.

The so-called FIX Protocol is a free, open and non-proprietary messaging standard that was developed in 1992 by Fidelity Investments & Salomon Brothers to facilitate bilateral communications framework for equities trading.

FIX has metamorphosed many times in a bid to satisfy investor taste complexities. With growing local supports now expanding, the Nigeria space will leapfrog from local support vendors’ investments in FIX to ensure the proposed FIX platforms succeeds.

Nigeria CommunicationsWeek investigations revealed that the palliative measure became necessary in view of inability of some capital market operators to upgrade to the software going by the mandate for them to recapitalize to N300million at almost the same time.

It was gathered that Nigeria Stock Exchange (NSE) has made the use of FIX Order Management System (OMS) technology mandatory for trading at the floor of the exchange. This has forced operators yet to upgrade to resort to trading under another operator that has upgraded thereby limiting their operation.

Amos Emmanuel, chief executive officer, Programos Software Limited- a major player in the implementation of the software at capital market space, said that the market is already using FIX OMS technology as some stockbroking firms have achieved the certification while others are at different stages on the process of using the recommended infrastructure.

He lamented the slow pace of migration which has lasted for more than three years now owing to downturn in the capital market.

“This intervention by the market regulator is a welcome development as it will help stockbroking firm without strong financial footing to achieve the upgrade and continue to be in business. With FIX OMS technology trading at Nigeria Stock Exchange is made very open and shareholders can as well monitor trading from their home or office,” he said.

He added that: “Many organizations have complied by acquiring the required software and communication technologies adequate for the FIX implementation. The good signs include that investor confidence will return to most implementing turbulent markets that may have previously experienced painful recessions, and market transparency will improved tremendously.”

Yele Okeremi, chief executive officer, Precise Financial Systems, said that the mandate to adopt the global standard of FIX protocol is a step in the right direction as it will allow indigenous software providers in the capital market to compete with foreign providers and as well give the local operators more opportunity to play on a global level.

He however, cautioned against some stock broking firm using the mandate to show preference for foreign software against the local ones.

He noted that it is security risk to allow foreigners control the country financial data now that they have taken control of our national data in the National Identity card scheme.

The software expert, urged capital market software providers to be intelligent and scale up their product to meet the adopted FIX protocol in order to consolidate their dominance in the capital market space.