The FIX Trading Community, the industry association that manages the world’s trading language, the FIX Protocol, has released new Recommended Practices for Algorithm Testing and Certification.
FIX Executive Director Jim Kaye said the Recommended Practices meet a need for standardised, electronic mechanisms for firms to test and certify their algorithms and communicate certification information to counterparties and regulators.
“Robust regulations exist to mandate the testing and certification of algorithms, but until now there has been a lack of consistency in how this requirement is met and communicated,” he said. “FIX’s algorithmic trading working group has worked through this in detail to define best practices, and guide firms in implementing these.”
The Recommended Practices cover workflows and message descriptions for:
- Defining the configuration of systems to be used for testing algorithms.
- Running tests, orchestrating different test systems where appropriate, and communicating the results of testing.
- Approving an algorithm as being suitable for production usage and communicating that in the form of a certificate.
The Recommended Practices ensure that algo certificates contain standardised, meaningful data to both to meet minimum legal requirements, and facilitate much fuller information for storage in in-house algorithm inventory systems. This includes precise definitions of algorithms beyond mere identifiers, comprehensive documentation of performed tests, and clear reporting of results.
FIX will hold an online FIX Information eXchange workshop to go through the Recommended Practices in the coming weeks.
The FIX Algorithmic Trading Working Group is now turning their attention to algos and AI. This includes modeling agentic workflows, governance and testing of agentic workflows, and using FIX over AI-native protocols such as MCP and A2A. FIX member firms are welcome to join the working group to contribute to this important work.
The FIX Trading Community is an independent global community where capital markets firms come together to solve common issues and shape the evolution of capital markets. FIX groups in over 60 countries are working on a range of global issues including digital assets; reference data; carbon trading; AI; algo trading; FICC and ETFs, while country and regional committees work together to manage local regulation and market structure matters.
