Automated Trading & Risk Management
Standards and best practices to help the industry and regulatory community utilise and control all aspects of computerised trading
From the earliest days of electronic trading, firms have used technology to automate many parts of the execution process.
FIX's work in this space includes developing standards for order submission, execution and data, helping firms to normalise and understand their data, and therefore measure their performance in a consistent and explainable manner.
FIX has also focused on governance for automated trading, including risk management and testing guidelines, and a full suite of messages and workflows for testing and certification of algorithms. Though rooted in algorithmic trading, FIX is working on extending these principles and designs into a world of general automation, increasingly powered by generative AI.
The FIX Protocol supports algorithmic trading by providing standardised, machine‑readable ways to declare and carry an algorithm’s configuration and identity throughout the trade lifecycle.
The StrategyParametersGrp is used to convey named parameterisations of an algorithm (e.g., how a strategy is configured) in a consistent, extensible structure.
Complementing this, Extension Pack EP297 enhances algorithm transparency in executions by extending the ExecutionReport(35=8) message with fields to identify the algorithm and its lineage—specifically including...
- AlgoCertificateID(3012) - certificate identifier
- AlgoTrialID(3097) - trial/configuration identifier, and
- LastAlgoID(3098) - execution algo identifier
...so firms can determine which algorithm/certificate (and, in trial contexts, which configuration) actually generated an execution.
Regulatory requirements such as MiFIR RTS 7 require that trading venues ensure their members certify algorithm testing to maintain market stability and transparency.
However, a lack of standardisation and limited electronic communication methods have posed challenges. In response, we have developed robust, standardised messaging workflows that enable meaningful, legally compliant, and comprehensive algorithm certification and reporting.
This approach provides precise algorithm definitions, thorough documentation of testing procedures and results, and clear pass/fail criteria, while also supporting interoperability between non-production trading systems and testing infrastructure to facilitate efficient test orchestration and information management. Details can be found in three extension packs - EP292, and EP295 and EP303, plus two recommended practices:
- Recommended Practices on Testing & Certification of Algorithms
- Recommended Practices on Unique Identification of Algorithms and Certificates
Please also refer to our overview of regulatory requirements relating to algorithm testing.
And for an overview of the regulatory requirements and a walkthrough of the FIX message and workflow design, watch our FIX Information eXchange podcast.
Regulators and financial institutions globally are becoming increasingly aware of the potential risks posed by the deployment of the latest AI technologies. To realise their full potential while limiting the risk of disruption, governance frameworks need to be adapted. We are building on our experience with algorithmic trading to consider this area and make recommendations to industry practitioners.
One example of regulatory interest in this area is the consultation on AI risk management guidelines from the Monetary Authority of Singapore, to which the FIX Trading Community issued a consultation response in March 2026.
FIX has also produced guidance on risk management best practices in global electronic trading for institutional market participants.
