Itiviti, the Stockholm-based firm that specialises in financial messaging infrastructure, has launched a FIX testing system designed to run continuously to test traders’ messaging systems.
Continuum has been designed to combine two technologies to test the FIX protocol, which is used by asset managers, traders and exchanges to complete orders. The first is model-based testing (testing designed around a model of desired behaviour of a system and then creation of individual tests based on the model) and, secondly, service virtualisation (a method of simulating software components in testing).
The integration of these technologies allows firms to implement automation without having to hire expensive and highly trained engineers, says Jim Northey, principal consultant at Itiviti.
(L) Michel Balter (R) Jim Northey, Itiviti
Itiviti is the result of a recent merger between Orc Group, a provider of trading and electronic execution software, and CameronTec Group, a financial messaging infrastructure and connectivity firm. Three years ago CameronTec acquired Greenline Financial, the supplier of the widely used Verifix FIX protocol testing software.
“We package those two advanced technologies in way that’s fit to purpose and customers can be up and testing in a few seconds,” said Northey. “The alternative is to outsource the testing. That might have been a viable option back in the day, but with the evolution of automated trading, with hundreds of thousands of orders a second, manual testing is simply not a viable option anymore. And it wouldn’t be any cheaper.”
One reason trading firms on both the sales and investment side of financial markets are moving to test automation is because they have to watch costs more closely, said Michel Balter, Itiviti’s head of strategy. “We saw an opportunity because the level of automation in FIX testing is low, while the cost of not testing is high,” he says. “Firms can no longer expect to see any large increases in the volume of trading to drive profitability.”
Regulatory drivers are also a factor, added Balter. Continuum has built-in automatic reporting, creating a trail of test results that firms can be shown to regulators if required. The CFTC’s proposed Regulation Automated Trading rules for risk controls and transparency measures for automated trading are one prime example of a new regime that gives the regulator a lot of flexibility in how it applies standards and launches investigations. “Having a running record of your tests gives you increased coverage,” said Balter.
