by Bari Trontz
The National Stock Exchange (NSX) is the first exchange to go live with DTCC’s Universal Trade Capture (UTC), an innovative service that helps mitigate risk, lower costs and streamline the way U.S. equity trade data is captured and distributed throughout the clearance process.
NSX’s Chief Information Officer Bruce Kulback recently sat down with @DTCC to discuss the benefits UTC is bringing to the exchange, which opted to implement UTC via the industry standard FIX (Financial Information eXchange) messaging platform.
NSX is the first exchange to go live with UTC. Why did you decide to sign up for UTC and why FIX?
We wanted to get trade information to DTCC as fast as possible after the trade, and UTC has moved us to real-time submission. We now submit locked-in trades to the UTC platform over FIX.
It was a natural progression for us to use the FIX engine as the exchange only accepts orders via FIX at this point and we have several FIX experts on staff. It’s also a good industry fit because everyone uses FIX on some level versus other protocols.
Finally, we also wanted to get onto DTCC’s real-time FIX platform so that when DTCC is ready to provide real-time clearing and real-time guarantees, we can quickly be a part of the platform.
How long has NSX been using UTC to submit trade messages to DTCC?
We have been using UTC since February 10, 2012.
NSX has been using FIX since October 2006. What are the benefits of this protocol?
All of our customer traffic comes in via FIX, which is readable, easy to troubleshoot and has recovery built into it. Communication issues that are caused by carrier breaks or processes failing on the client side, or on our side, are fully recoverable.
It also gives you standards on tags and the meaning of what a client identifier is. The standards are much better than inventing proprietary protocols for every purpose. So, we are very happy with the ease of use of FIX.
How does NSX submit trades for clearing with UTC?
For clearing, we implemented the same technology that we use for trade reporting. We take all our clearing records and we put them in a database where all of the transactions are synchronized. Then we send them to DTCC and they’re fully recoverable. With UTC, we also now have a way to gauge the performance of our submission to DTCC with respect to our matching time. So, it’s really a win-win. We have full recoverability, which is much better than using the flat file and multi-batch process, and we have transparency in terms of the timing.
Has UTC brought any other benefits to the exchange?
Yes, another thing I really like about UTC is that, in terms of operations via electronic messaging, we now know that we are in balance at the end of the day because of the “good-night messages” and the proactive rejects and edit checks that are done.
With UTC, we now know earlier in the day if there is a potential problem with a pending failure. And, because we know earlier rather than later, we can take care of it during normal business hours. Also, at the end of the day – we come down at 8 p.m. – we do the “good-night handshake” and we know immediately the transaction count is good.
We no longer need to call DTCC’s Enterprise Service Center and verify the number of records; we now get an electronic verification on that. @