The FIX Trading Community, the industry association that manages the world’s trading language, the FIX Protocol, has responded with feedback to IOSCO’s Supervisory Toolkit for AI Use in Capital Markets with a suite of recommendations based upon the industry’s established approach to algorithmic trading.
FIX Executive Director Jim Kaye said that while there was much debate about how the finance industry should deal with AI, there were robust, globally accepted practices already in place that are transferrable to many of the problems arising from AI adoption.
“Many of the potential problems with agentic AI can be mitigated by ensuring appropriate testing, certification, and workflow oversight and record-keeping,” he said. “The good news is that FIX has already done much of the groundwork as part of our work on algorithmic trading, and we are now working on deployment-ready practices that are based on or build upon existing practices, making them easier for firms to implement.”
Mr Kaye emphasised that the FIX AI Working Group – which includes buy- and sell-side firms – strongly recommended that global, industry-led standards be put in place for agentic AI governance, testing, and certification. The Group has already developed a cross-jurisdictional algorithm testing and certification methodology, which includes scenario testing, system interoperability, and market disorder contribution testing.
“Relying on fragmented, firm-specific approaches injects just the types of risk people worry about when it comes to AI,” he said. “IOSCO is absolutely right to centre itself in this discussion, and our working group members are very keen to contribute a practical, industry-led solution that allows for innovation without injecting additional risk to global markets.”
The FIX Trading Community is the custodian of the FIX Protocol - the trading language that underpins global financial markets. An independent, non-profit, global organisation, FIX brings firms together to solve common issues and shape the evolution of financial capital markets. Through more than 40 working groups and committees in over 60 countries, FIX maintains and develops the FIX Protocol and other trading standards; helps shape regulation; and supports the industry across a wide range of global issues including digital assets implementation, AI and automation, liquidity, data quality and trading workflows. FIX's work is only possible through the support of its members - to find out more visit www.fixtrading.org.
