Dear Marc, dear Elliot: could you please describe the FIX MMT and its benefits?
Marc Berthoud (MB): The industry-wide adoption of common data standards is key to overcome the challenge of producing consistent data across a highly fragmented market structure. The FIX MMT – short for Market Model Typology – is one of the initiatives which aims to create a uniform trade flagging standard supporting conformance with MiFID/MiFIR post-trade transparency requirements.
Elliot Banks (EB): Since MiFID/MiFIR’s entry into force in 2018, the MMT has been widely adopted by the majority of European-based trading venues, OTC and systematic internaliser (SI) trade reporting operators and vendors. As a result, MMT has delivered major improvements in data consistency, data quality and transparency as well as contributed to a reduction in data processing costs.
What where the recent improvements, and which can we expect next?
MB: More recently, the FIX MMT V4.0 data model adopted a number of new features, including enlarging its data model beyond the existing v3.04 data structure. These adaptations mean that the FIX MMT v4.0 is fully up to speed with the flagging requirements outlined in the latest MiFIR review including RTS (Regulatory Technical Standards) 1 and RTS 2.
It is worth noting that despite the necessary enlargement of the data model the efficient encoding data structure keeps the existing 14 positions of the MMT string. This will limit the costs of adaptation to FIX MMT v4.0. The application date for the modified regulatory trade flagging requirements is expected to be set on 1 January 2024.
How have SIX and its stock exchanges been supporting the development of the FIX MMT?
MB: Already at an early stage, SIX Swiss Exchange – along with other interested market participants – recognised the opportunity to adopt a standardised and logically structured way to represent trade flags. With regards to the implementation, SIX Swiss Exchange was among the pioneers in early 2018, supporting the full range of MMT trade flags on its Multi Dimensional Data fluX (MDDX) data feed. Following the takeover of BME by SIX, we integrated all BME data sources in our MDDX feed in 2022, so MMT codes are available across the board.
Why was development of the FIX MMT so important?
MB: Without MMT harmonisation, all stakeholders along the market data value chain would have implemented their own solution for compliance with MIFID II’s RTS 1 and RTS 2 trade flagging obligations. In the end everyone would have been compliant, but without any coordinated data standardisation. So it was the industry wide collaboration, driven at first by the Federation of European Securities Exchanges (FESE) and then by the FIX Trading Community, that enabled an almost complete alignment behind the MMT data standard. Discover all FIX MMT Data Standard adopters.
Are there other benefits when using FIX MMT trade flags?
EB: Yes, to give just one concrete example: the FIX MMT trade flags have been instrumental in normalising trade data in the BMLL Data Lab. They support the unambiguous categorisation of transactions. This is essential for all market participants running advanced analytics, with use cases for buy-side firms, sell-side brokers and market operators.
Can you share more insights on the collaboration of SIX Swiss Exchange and BMLL?
MB: Beside the Swiss EBBO Service, my colleagues at the Swiss stock exchange working on advanced analytics make extensive use of the BMLL Data Lab. This analytics platform grants immediate access to billions of fully normalised tick data across all relevant markets. It delivers an amazing computational power and data storage capacity, allowing complex calculation to be made across millions of records within seconds.
BMLL Data Lab's findings are widely used in Business Intelligence reports provided to senior management of the business unit Exchanges of SIX. They are also fed into our product development pipeline and can improve the insights we offer when talking to trading participants.