CameronTec Builds a Bridge to FIX’s Future

By Eugene Grygo, Freelance Business and Technology Editor — September 2010

Catalys is CameronTec’s solution for the next dimension in FIX computing. The pioneering management environment aims to help firms gain greater control over their sprawling FIX environments. Of course, CameronTec hopes Catalys will overpower rival FIX engines that remain isolated from the rest of the enterprise.

At a time when securities firms are very cautious about their IT investments, FIX infrastructure and connectivity solutions provider CameronTec is boldly forging ahead with an ambitious offering that is explicitly more than an upgrade and intends to usher in a new era in FIX computing.

By all accounts, FIX is hitting its stride in the Age of Electronic Trading, moving well beyond the front lines of equity trading to post-trade functions, foreign exchange, fixed income, derivatives and algorithmic trading. In fact, this past spring, FIX Protocol Ltd., the overseer of the open standard, launched the algorithmic trading definition language, or FIXatdl, version 1.1, securing FIX’s role in the vanguard of electronic trading.

In addition, earlier this year, in a report from European consultancy Oxera, the FPL reported that the greater, global usage of FIX — even during difficult economic times — has had a beneficial impact on capital market operational efficiencies. FIX computing has also cut risk and spurred cost savings that could then be passed along to investors, according to the report. It facilitates real-time tracking of increasingly complex financial instruments and can ease regulatory monitoring, which contributes to financial stability. FIX also helps streamline connectivity, which boosts the bottom line.

CameronTec has decided to amplify this FIX wave with the launch of Catalys, an innovation that includes key management, testing and monitoring tools. The vendor is targeting firms that need to better harness their FIX nodes across the globe.

To do this, Catalys offers new support for the Java Management Extensions (JMX) standard that will bolster control over FIX nodes. It also supports runtime configurations that will aid operational flexibility as well as performance enhancements and testing tools that speed up development and migrations. Of course, the CameronFIX engine, complete with performance improvements, is included in Catalys.

“Catalys and the vision behind it are in response to the success of FIX, which has gone from an initially equities-focused protocol to a pervasive ecosystem that extends to multiple assets traded across the globe,” said Max Colas, chief product officer for CameronTec.

A Holistic Approach

“User firms need more from us in order to fully realize the vision of remote control and transactional efficiencies,” Colas said. The company, a subsidiary of Orc Software, is working to make this vision a reality for cash-strapped firms that want to streamline their FIX enterprises and yet optimize overall FIX performance. To accomplish both requires a holistic approach.

In fact, treating FIX as a separate entity is a thing of the past. FIX has become a major player in the financial technology infrastructures of most trading enterprises, linking to major operations. Catalys encompasses “the FIX ecosystem” to help firms stay ahead of the competition — a vision validated by the company’s users, Colas said. “We observed this with our clients,” he said. “We also saw tangible evidence of this in the surveys we conducted to better understand the needs of the market.”

Yet many of CameronTec’s rivals still view FIX engines as “isolated pieces of engineering,” Colas said. They do not foresee the need to build links among engines to “form a whole that is more consistent and will provide efficiencies.”

But getting an enterprise-wide view of FIX engines and more control over them is complicated by the fact that these engines are scattered across the world, among asset classes and data centers.

A CameronTec client, John Greenan at BNP Paribas Investment Partners, contacted in a recent survey of CameronTec users, pinpointed “an explosion of complexity” in FIX computing as the result of the protocol’s popularity. “We, the FIX community, have to find ways to keep it manageable even if we can no longer keep it simple,” Greenan said.

Large firms like BNP Paribas are among those clients that could benefit the most from Catalys, especially if they have ramped up their usage of FIX despite the recession.

“Some institutions with up to 200 and 300 instances of CameronFIX will be delighted to see the efficiencies in moving to Catalys,” Colas said. “They will improve the ways they monitor, control, manage and configure their FIX infrastructures. Progressively, as people use more FIX, they will naturally see the benefits of Catalys.”

Many CameronTec customers have already begun grappling with the need to unify their FIX nodes.

“We have been working closely with some firms that have already begun grappling with the need to unify FIX nodes,” Colas said. “Today, firms and FIX network providers want to be able to control and configure servers remotely from central repositories via command centers. They want to do that with forward-looking protocols such as JMX.”

Keeping it Manageable

In a nutshell, JMX resembles the Simple Network Management Protocol (SNMP) of the Internet Protocol Suite, said Steve Christinson, chief technology officer for CameronTec. As a key component of network management platforms, SNMP helps firms keep control over network-attached devices much like JMX provides an open way to communicate with JMX-enabled Java Virtual Machines (JVMs).

“We provide an open JMX-style API, which is how customers interact with the various services within the Catalys ecosystem,” Christinson said. “Many large customers will already have on-site the tools they need to be able to manage our servers because we’ve chosen an open standard.”

The JMX-enabled component will have no discernible performance impact on servers, Christinson added.

“When we talk about performance metrics, we’re always talking about throughput — how many messages can I get through a session per second, and latency, how long does it take for this message to traverse the engine. There is nothing inherently in the path of that message, nothing to do with JMX anyway. The lower latency and the higher throughput should appeal to those engaged in high frequency trading.”

Aside from JMX, Catalys offers a balance of traditional capabilities such as allowing users to configure via XML and new ones such as the ability to configure extra sessions at runtime.

“First, we have retained the ability to specify Catalys configurations via XML,” Christinson said. “Customers who do that today with CameronFIX will be able to migrate to slightly different XML formats and continue to do that… A lot of customers have already written comprehensive configurations — bootstrapped systems, where they pull their configurations from a database and propagate it to a node. They propagate the configuration as XML files. They’ll still be able to do that.”

Facilitating extra sessions at runtime is significant because, a few years ago, users would turn on their FIX engines in the morning and shut them down at night. The refresh cycle was aligned with how a firm trades, which often meant firms trading via the exchanges in their localities, Colas said. However, many of CameronTec’s clients run their FIX engines continuously as they trade via multiple venues and asset classes. Trading FX globally, for instance, has led to new rules.

“Some firms start FX trading on a Sunday afternoon in New York and stop trading on Friday night or Saturday morning and sometimes continuously,” Colas said. “So we wanted to be able to better address these new requirements of the marketplace for continuous trading. We also wanted to enable them to do it safely.”

Safe Landing

Ultimately, firms will have to implement a vendor’s vision safely and that can sometimes be a challenge for user firms. But Catalys should fit in with the integration testing regimens of most firms, Christinson said.

“Implementation time will be proportional to the size of the installation and the comprehensiveness of their test suites,” Christinson said about users’ deployments. “We think the migration will be smooth but that doesn’t imply that it will be immediate.

To assist with migration and continuous quality assurance, Catalys offers a testing framework that will cover all aspects of the FIX environment, including JMX interactions, Colas said. CameronTec built its own testing tools and expanded beyond traditional checks of FIX conversations because FIX in production has never been limited to its own environment. “That’s pushing the envelope because I don’t know of anyone else who is doing that,” he said.

To ease integration, CameronTec is offering backwards compatibility between an existing offering, the Dashboard management console, and the JMX-based management infrastructure, Christinson said. “The two will co-exist,” he said. “We’re trying what we can to make hybrid environments possible and therefore migration can be evolutionary — at the bank’s pace.”

On another matter, Christinson pointed out that, “The migration to Catalys will be an opportunity for firms to trim unnecessary custom code, which will streamline the client code base. Many will find what they previously developed in-house can now be achieved out of the box, in particular for message management using our embedded rules engine.”

Once the smoke clears from an implementation, a key result will be the improved control over the data that orbits the FIX flow. This efficiency should translate into cost benefits that help firms keep their edge over the competition, Colas said.

“Catalys is as much about the FIX flow as the information around the FIX flow,” Colas said. “It’s great to have the fast FIX engine but if you don’t know the latency of the FIX engine in real-time or if you can’t control that latency, it doesn’t amount to much.”

Ultimately, Colas and Christinson hope the availability of Catalys will encourage firms to transform their incumbent FIX implementations and embark upon the next chapter in FIX computing.

“FIX engines that are not well supported, inflexible or do not provide firms with the high level of performance and operational robustness they require are the best cases for review,” Christinson said. This is also an opportunity for user firms to review their FIX suppliers’ plans for the future.

“It’s time for people to look at the vendor landscape and understand who is considering FIX as an investment and as a strategic driver, and who is not,” Colas said. “It’s fair to say that some vendors have clearly exhibited different strategic outlooks and FIX is not a center of investment for them.”

Investing in FIX is everything for CameronTec.

“Some of the FIX providers are literally consultancy shops in disguise,” Colas said. “That’s not our philosophy. The FIX world requires a continuous focus on technology and that’s what we are driven by. The industry is coming out of a turbulent period and now needs to build the foundation for future prosperity. As with civil engineering, the strength of connectivity businesses will always be determined by the strength of their core, which justifies the investment.”