FIX Group Delays FIPL Latency Standard

Messaging standards body FIX Protocol Limited’s Inter-Party Latency Working Group has postponed the release of version 1.0 of its FIX for Inter-Party Latency protocol (FIPL), which aims to provide an industry-wide standard for measuring and reporting latency between firms and trading venues, to make it easier to compare latency metrics for different markets.

Henry Young, chief executive of latency monitoring vendor TS-Associates and chair of the working group, confirms that the FIPL standard—originally planned for release late this year (IMD, 12 Sep 2011)—will now be delayed until the first quarter of next year.

"The first thing to say is that everybody involved in FIX Protocol provides their time on a voluntary basis and has a common goal of ensuring that we take the time necessary to comprehensively address everyone's business needs with FIX for Inter-Party Latency," Young says. “Secondly, there has been a huge amount of technical discussion around developing a protocol from the prototype that was tested last March into something that will be workable in the real world and will be able to handle situations going wrong—for example, messages getting lost—so we’ve been working hard putting in recovery mechanisms.”

Young says the challenge is to keep these mechanisms as simple as possible while enabling them to handle as wide a range of useful situations as possible, which has been the focus of the last two months’ work by a design sub-group of the FIPL working group. The sub-group presented the final version of the 1.0 release to the entire FIPL working group last week. “We are going to be taking feedback from the working group this week. After that, it has to go through the FPL Global Technical Committee (GTC) for approval, and then goes open for public comment,” he says.

Confident of Adoption
As such, the formal announcement of the standard—which was originally scheduled to coincide with the FPL Americas Trading Conference in November—will now take place in Q1 next year, though Young hopes to have released details of the protocol for public scrutiny beforehand.

Donal Byrne, CEO of Dublin-based latency monitoring technology provider Corvil, which is a member of the FIPL working group, told delegates at Bloomberg’s recent Enterprise Technology Summit in London that he expects the standard to ultimately achieve similar levels of adoption as other FPL-driven standards, like the FIX Protocol for trading standardization and the bandwidth-reducing FAST (FIX Adapted for Streaming) Protocol designed for compression of low-latency, high-volume datafeeds.

“There is a broad acceptance of the need for a standard, so the general feeling is that if someone puts a standard out, they would gain a lot of support… [since] people with superior information and superior analytics get superior trades,” he said, adding that the working group is confident that a standard for latency measurement will be in place in the New Year.