Chicken and Egg Problem for RIXML


New York, NY – With over 100,000 sell-side research reports flooding the e-mail boxes of buy-side analysts and portfolio managers each week, you would think that finding a way to make this research more accessible and useable would be a high priority for institutional investors and the sell-side firms that serve them.  However, one potential solution to this issue — the Research Information Exchange Markup Language (RIXML) — remains under adopted by both the buy-side and sell-side.

Founded in 2001, is a consortium of sell-side, buy-side, and associate (financial information vendor) member firms that make the decisions and participate in the design of a standard Extensible Markup Language (XML) for the tagging, distribution, and retrieval of investment research.

The use of XML technologies is prevalent throughout the financial services industry.  Some of these standards include:·        RIXML (Research Information eXchange Markup Language) ·        XBRL (eXtensible Business Reporting Language) ·        MDDL (Market Data Description Language) ·        FIXML (Financial Information eXchange Markup Language) ·        NewsML (NEWS Markup Language) ·        FpML (Financial Products Markup Language) Currently, the RIXML consortium is made up of 25 member firms, including:

Buy Side Firms                Sell Side Firms                 Associate Members
Fidelity Investments          Bank of America                Bloomberg
MFS Investments               Bear Stearns                     Blue Matrix
Putnam Investments          Citibank                            FactSet
                                        Credit Suisse                     FAST
                                        Deutsche Bank                  Industry Classification Benchmark
                                        DKB                                  Instant Information
                                        JP Morgan                          Reuters
                                        Merrill Lynch                      Seventh Wave Systems
                                        Raymond James                 SNL Financial
                                        UBS                                   Standard & Poor’s / Capital IQ
                                                                                 Thomson Financial
Ultimately, the value of RIXML is that producers of investment research can tag their content in a more consistent and granular way, allowing users (the buy-side) to search these documents more accurately, thereby more easily accessing the research content they think is most important.  Consequently, RIXML tagged research should be more useful to the buy-side.  In addition, adopting RIXML should also enable sell-side firms to create and deliver more value-added products to clients – a development that could lead to increased research revenues for these services. Unfortunately, several challenges have faced the RIXML consortium in its effort to build support for the standard. Since the inception of RIXML, sell-side firms have faced consistent pressure from various regulatory changes, falling equity commission rates, and most recently unbundling. As a result, most sell-side firms have not been terribly interested in undertaking new research technology initiatives required to adopt RIXML – particularly without direct evidence that buy-side clients want it (or will pay for it).On the other hand, many on the buy side have been reluctant to invest in the technologies needed to read and interrogate RIXML-tagged research until the sell-side is producing a significant amount of their research in RIXML. As a result, a chicken and egg scenario has developed where many on the sell-side have wanted to hold off from producing the tagged research until the buy-side can use it.Fortunately, a variety of market data and technology vendors have done a considerable amount of work to break this deadlock by making the production and distribution of RIXML-tagged research easier for both producers and consumers of that research.  For example, FactSet, Capital IQ, Seventh Wave Systems, Instant Information, and Blue Matrix are a few of the vendors who have introduced products which make implementing and using RIXML more straightforward.Another development which could help increase the adoption of RIXML by the buy-side and sell-side has been the recent partnership between RIXML and XBRL (the eXtensible Business Reporting Language).  As we have mentioned in the past, the adoption of XBRL could be a real boon to both sell-side and buy-side analysts by providing “straight through processing” of company level financial data.  Of course, the real issue here is when (or if) the SEC will mandate that public companies report their financial data in XBRL format.  A solution which provides both RIXML and XBRL could make both the production of equity research by investment analysts and the consumption of equity research by the buy-side much more efficient and ultimately more valuable to all involved in the process.


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