FIX Trading Community releases guidelines on commission unbundling


By Flora McFarlane.

A new report has set out practices to follow for pre- and post-trade representation of commission steps across all asset classes.

With under two months to go until MiFID II becomes a reality, FIX Trading Community has published guidelines to assist firms with unbundling. The incoming regulatory change requires firms to explicitly separate commissions into their distinct parts, covering components such research which is a particular focus of the rules.

FIX members have examined ESMA’s terminology for the regulations, analysing new concepts such as research-payment accounts (RPA) alongside the traditional use of Commission Sharing Agreements (CSA) which generally handled commission payments in the background.

Previously, FIX guidelines did not break down commission type distinctions into components such as execution, clearing, and research. The new recommended practices apply to any implementers of FIX for pre- and post-trade processing across all asset classes.

David Pearson, head of post-trade at Fidessa and co-chair of the FIX global post trade working group said: “The FIX Working Group recognised that the current guidelines and message specification needed to be enhanced to allow the post-trade process to handle multiple commissions on the allocation instruction and confirmation messages.”

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