Introducing the Fix8 Market Tech Matching Engine (F8ME) - a high performance, scalable rules based trading engine designed for brokers, institutions and exchanges.

Using the industry standard FIX dictionary, F8ME integrates perfectly into the Fix8MT stack to provide client facing FIX connectivity, trading and internalising capability.

matching engine diagram

Introduction to Matching and Internalising

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Any firm that trades with its clients using its own capital is allowed to register as a systematic internaliser, or SI. Whereas traditional exchanges or other venues match multiple client orders, SI venues are designed to fill clients’ buy or sell orders directly. SIs must use their own capital to meet customers’ demands. This is essentially old-fashioned market-making, but within a modern regulatory framework. Most of the big global banks either are or plan to register as a systematic internaliser in at least one and often more than one asset class.

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A trade can be internalised when the trade is completed for an investor within their brokerage firm. The process is often less expensive than alternatives as it is not necessary to work with an outside firm to complete the transaction. Most jurisdictions mandate that the price given to the client by the SI must lie within the current National Best Bid Offer (NBBO).
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Brokerage firms that internalise securities orders are able to take advantage of the difference between the price they buy shares for and what they sell them for (otherwise known as the 'spread'). A firm may realise a better spread by selling its own shares rather than by selling them on the market. Because these share sales are not conducted on the open market, the brokerage firm is less likely to influence prices if it sells a large portion of shares.
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A matching engine is the core software component of an electronic exchange, broker internalisation system or dark pool facility. It matches bids and offers to complete trades. Matching engines use one or several algorithms to allocate trades among competing bids and offers at the same price, the most common being price/time priority.
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The F8ME is a modern flexible high performance matching platform that features:

For more information or to discuss how F8ME can work for you please contact us.