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NYSE Euronext Accelerates Growth in Asia with Strategic Acquisition of Metabit, a Leading Provider of Market Access Products

— Strategically complements NYSE Technologies’ product portfolio and Asian offerings

— Addresses growing customer interest and expanding Asian financial marketplace

— In-line with NYSE Technologies’ strategy of building a global liquidity network

 New York and Tokyo – August 1, 2011 – NYSE Euronext (NYX) announced today it has entered into a definitive agreement to acquire Metabit, a leading Tokyo-based provider of high performance market access products throughout Japan and Asia. Metabit will operate as a product line within the NYSE Technologies portfolio. The transaction is expected to close in third quarter of 2011. Terms of the acquisition were not disclosed.

Skilled with in-depth experience and understanding of financial markets in Asia, Metabit specializes in streamlined, low-latency technology solutions that enable industry-leading access to financial markets across Asia. Metabit’s products connect buy-side order flow with sell-side exchange participants and are designed exclusively for low latency direct market access (DMA) and exchange connectivity to markets through-out Asia. The company is headquartered in Tokyo, with offices in Australia and Hong Kong. Metabit has built a trading community of more than 140 trading firms in Asia.

“Metabit’s products are built in Asia for Asia, and this combination fits our strategy, our connectivity business and our customer interests,” said Stanley Young, CEO of NYSE Technologies. “Metabit has a highly experienced and respected management team, and we recognize and value the success Metabit has had in Asia, especially in Japan. We will continue the further development of this local focus while also maximizing the value of the NYSE Euronext brand and relationships.”

Mr. Young continued: “Furthermore, Japan and Asia are priorities for NYSE Euronext and we believe this is absolutely the right time to further invest in the region. We fully expect this transaction to accelerate our efforts as a leading technology provider across the Asia-Pacific region. We look forward to welcoming Metabit and its customers to NYSE Euronext, and to delivering the benefits of Metabit to our customer community.”

Daniel Burgin, CEO of Metabit, said: “Our combination with NYSE Technologies will be highly beneficial to delivering innovative solutions to our customers and to accelerate achieving our long-term business goals. We remain committed to our local business focus and service quality in Japan and throughout Asia, whilst being strengthened by NYSE Technologies’ product suite that is highly synergetic to our local solutions. The people and products of our combined companies will provide significant expertise and scale to NYSE Technologies’ business in the region. Joining forces represents a truly exceptional opportunity to build on our local success in order to increase our value proposition to our Japan and Asia customer base. We now have the opportunity to leverage our assets with NYSE Technologies and move to the next level. For the benefit of Asia-based customers, we will now expand our reach and capabilities globally.”

 Metabit’s Asia franchise has seen excellent growth as a result of a persistent product and client strategy and investments into Asia. Today, Metabit covers all DMA sectors outside Japan, ranging from China (“B” shares), India, Hong Kong, Korea, Singapore, Taiwan, Thailand, Philippines, Malaysia, Indonesia, Pakistan, Australia and New Zealand. Metabit’s products, being built in Asia for Asia, focus to connect the local broker community in each country, in combination with the traditional group of global trading firms. Metabit will continue to resell and provide support to users of CameronFIX as they have since 2002.

 Upon closing, Mr. Burgin will head the NYSE Technologies Asia business and report to Mr. Young. Peter Tierney, Managing Director of NYSE Technologies will become the Chief Operating Officer of the combined business in Asia, and together they will lead the business operations.

Source; NYSE Tech, 01.08.2011

Filed under: Asia, Australia, China, FIX Connectivity, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, News, Trading Technology, , , , , , , , , , , , , , , , , , , , , , , , , , , ,

NYSE Technologies expands SFTI Network to Mexico – Interacciones Casa de Bolsa (ICB) as Prime Destination

Interacciones Casa de Bolsa of Mexico (ICB) and NYSE Technologies, the commercial technology division of NYSE Euronext, today announced that ICB has joined the Secure Financial Transaction Infrastructure (SFTI) as a prime destination to Mexico.

“NYSE Technologies is excited to work with one of Mexico’s leading capital markets firms on a project that further opens Mexico to more global investors while also bringing the global markets closer to local investors,” said Stanley Young, CEO, NYSE Technologies.  “When combined with our industry-leading technology, global footprint and unparalleled customer community, Interacciones’ extensive coverage in Mexico and its focus on facilitating foreign investors in Mexico will enable us to jointly implement a new breed of direct market access solutions unlike anything available in the region.” 

Raúl Garduño, CEO and General Manager of ICB said “Connection to SFTI is an important step in a larger commitment to invest in next-generation electronic trading technologies. Buy-side clients in North America and Europe will have access to a complete provider of investment services in Mexico from custody to asset management, foreign exchange, research for equities, derivatives, fixed income products and stock loan. As we continue our international expansion, ICB will work further with NYSE Technologies to build and expand this technology platform, providing international investors with robust, innovative solutions for trading electronically in our markets.”

NYSE Technologies’ SFTI network is the highly resilient, ultra low-latency communications backbone created for the financial industry in 2002.  It provides connectivity to multiple exchanges, market centers and content service providers, including all of the National Market System venues in the U.S.  SFTI also connects to over 1,300 market participants and offers third-party technology products through its unique hosted solutions platform.   Designed to be the industry’s most secure and resilient network, SFTI is specifically built for electronic trading and market data traffic thus enabling firms to reduce their time-to-market, improve their performance and significantly lower the cost of their trading infrastructure.

Source: MondoVisione,23.02.2011

Filed under: FIX Connectivity, Mexico, Trading Technology, , , , , , , , , , ,

Asean exchanges select Nyse Technologies to build trading network

A group of Asean stock exchanges have appointed Nyse Technologies to build a direct market access electronic trading link.

Last February Bursa Malaysia, the Philippine Stock Exchange, Singapore Exchange and the Stock Exchange of Thailand outlined plans to create a single access point to ease cross-border trading and attract more international fund flows into the region. Indonesia’s exchange was initially part of the group but is no longer involved.

The partners have now signed a letter of intent appointing Nyse Euronext’s IT unit to design, build and manage the technology required for the trading link.

Nyse Technologies says its system will be underpinned by a resilient networking infrastructure that will interconnect the Asean member exchange’s and, through them, their respective communities.

The system will include services that tap this network to provide integrated market data feeds from all the participating markets and a standardised entry point for trading. Expansion of the trading link’s markets will be helped by the risk management and controls put in place, says Nyse.

In addition, the system will integrate with the Nyse Euronext communication network infrastructure, SFTI. This will give STFI members streamlined and cost effective access to trading in the Asean Trading Link markets.

Duncan Niederauer, CEO, Nyse Euronext, says: “The Asean Trading Link will strengthen the competitiveness of the member exchanges and enable them to better serve their customers. National and regional interest will be well served by giving investors greater access to global capital to facilitate new development, growth and wealth creation.”

Francisco Edralin Lim, CEO, Philippine Stock Exchange, adds: “Nyse Technologies brings to the table vast experience in the Exchange solutions business and we are confident that they will deliver cutting edge solutions that meet all our requirements. We are also excited about the possibilities of leveraging their extensive order routing networks to bring order flow into the Asean markets.”

Source, Finextra, 08.02.2010

Filed under: Asia, Exchanges, Malaysia, News, Singapore, Trading Technology, , , , , , , , , , , , ,

Tokyo: TSE taps Nyse Technologies for Arrowhead feed handlers

Nyse Technologies, the commercial technology unit of Nyse Euronext (NYX), today announced the successful launch of enhancements to its super-low latency market data platform specifically designed for the Tokyo Stock Exchange’s new Arrowhead trading platform.

As the new equities trading system for the Tokyo market, Arrowhead has been implemented to support increased trading volumes and the performance demands of ultra-fast electronic trading strategies. The new market technology offers new and enhanced data feeds to the industry and NYSE Technologies has successfully launched support for these new feeds on its high performance market data platform.

“We are very pleased to offer our proven feed handlers for the TSE and its Arrowhead platform. Ten large international clients have successfully deployed and tested the NYSE Technologies market data platform and feed handler suite for their Arrowhead trading environments,” said Peter Tierney, Senior Vice President, NYSE Technologies. “The technology was developed by our engineering team in Asia over the past 6 months. This team was established in 2009 with an emphasis on working closely with Asia-based markets and clients to ensure the superior speed, reliability and functionality that our feed handlers and middleware have demonstrated in other markets around the world.”

TSE’s Arrowhead equities trading system went live on Monday, January 4, 2010. Coinciding with the launch, NYSE Technologies’ market data platform was deployed at 10 major trading firms around Tokyo, to provide secure, high-performance feed handling and middleware for the new Light, Standard and Full feeds. The NYSE Technologies solution deploys with either Local Direct Memory Access (LDMA) or Remote Direct Memory Access (RDMA) middleware and supports data presentation in Japanese or Western book formats. The LDMA-based solution has end-to-end latency of 30 microseconds. With its speed and its small datacenter footprint, this solution has already been installed by a number of clients in the TSE’s newly launched co-location site.

In 2009, NYSE Technologies has focused on building enhanced trading support solutions like its market data platform and feed handler suite for all major AsianAsian markets. Support for the Arrowhead feeds brings the number of Asia markets available on the platform to 20.

Source: FINEXTRA, 06.01.2010

Filed under: Asia, Data Management, Exchanges, Japan, Market Data, Trading Technology, , , , , ,

Managed Market Data Services: Performance and Efficiency – A-TEAM & NYSE Technology

Market infrastructure is evolving at a pace that even the most technology-savvy financial institutions find challenging. New execution venues are popping up everywhere fragmenting liquidity and creating cross-dependencies between primary and derivative marketplaces. The move to fast markets and trading automation is cutting response times and increasing data volumes. Markets have shown a 70% increase in volume over the last year alone.

Update latencies of less than 10 microseconds are now possible — even commonplace. Market data rates in excess of 20 billion update messages per day are on the near horizon. With a universe of more than 250 real-time markets trading in excess of 40 million instruments and derivatives, developing and delivering a market data system for today’s markets is, at best, problematic.

Never before have financial institutions faced a more pressing need for flexible data acquisition solutions. And the requirement applies across the board: From the largest tier 1, bulge bracket firms, to the pluckiest speciality execution firm, firms of all shapes and sizes are seeing the market data management requirement leap to the top of their priority lists.

This white paper provides an analysis of the challenges facing market data technologists everywhere. It looks at the platform requirement, outlines total cost of ownership considerations, and discusses the relative merits of a managed or hosted service approach like NYSE Technologies’ SuperFeed™.

Source: A-TEAM November 2009

Market Data Managed Services: Performance_and_Efficiency Oct.2009 A-TEAM & NYSE Technology

Filed under: Data Management, Data Vendor, Library, Market Data, News, Reference Data, Standards, , , , , , , , , ,

NYSE Technologies extends Superfeed™ Market Data Coverage to Asian Markets

NYSE Technologies, the commercial technology unit of NYSE Euronext (NYX) and a world leader in trading technology and low-latency market data solutions, is actively expanding its SuperFeed™ product suite to Asian markets. SuperFeed™ is NYSE Technologies’ fully managed and hosted data ticker plant, with microsecond latency and coverage of major markets in North America, Europe, and now Asia. SuperFeed™ Asia currently provides access to the Hong Kong Stock Exchange’s Price Reporting System (PRS) derivatives feed and Market Data Feed (MDF) cash feed via its Hong Kong data centre, with plans to expand to other major Asia-Pacific markets in 2010.

“SuperFeed™ is one of our most comprehensive and flexible market data products globally, delivering microsecond latency over high performance middleware,” said Peter Tierney, Managing Director, Asia-Pacific, NYSE Technologies. “The addition of major Asia markets complements existing offerings in US and Europe, and allows sophisticated international traders to receive data from all the key global markets through a normalized and managed feed.”

“We’re pleased to see the expansion of NYSE Technologies’ SuperFeed™ product into Asia, a region becoming increasingly attractive to our high frequency trading clients,” said Nigel Kneafsey, CEO at Options IT, a leading provider of high-performance technology infrastructure as a service and ultra-low latency market connectivity for hedge funds, proprietary trading shops and brokerages. “Our clients leveraging SuperFeed™ in the U.S. and Europe will surely see value in leveraging the same application in Asia.”

NYSE Technologies’ customers can obtain direct connectivity to the SuperFeed™ Asia service from the Options IT facilities in Hong Kong. The service is already live with a large global trading firm and under evaluation by several others.

Source: MondoVisione, 09.11.2009

Filed under: Asia, Data Management, Data Vendor, Exchanges, Hong Kong, Market Data, News, Trading Technology, , , , , , , , , ,

Shanghai Stock Exchang International listing Board on track

Positive signals for an international board on the Shanghai Stock Exchange point to a nearing launch. But major obstacles remain.

A growing din within financial circles suggests China’s proposed international board for foreign company stock trading is on the runway and approaching takeoff.

On September 8, Commerce Minister Chen Deming said at an investment conference in Xiamen that China would indeed allow listings by qualified foreign invested companies on mainland exchanges.

The same day, CITIC Securities International Chairman Ted Tokuchi said at a Caijing conference that if the Chinese stock market remains stable, a first draft for board listing rules could be released after China’s national holidays in early October. The news drove the A-share Shanghai Composite Index up 1.7 percent to close the day at 2930 points.

One or two foreign companies are expected to list through the board on the Shanghai exchange early next year, announced Fang Xinghai, director of the municipal Shanghai Financial Office, while describing Shanghai’s effort to build a new trading platform during a London visit in mid-September.

In another positive signal, Caijing learned that the China Securities Regulatory Commission (CSRC) has set up a working group under CSRC Vice Chairman Yao Gang that’s specifically dedicated to the task of building an international board.

At the Shanghai exchange, General Manager Zhang Yujun is in charge of a separate working group preparing for the board’s launch. And it’s been confirmed that the yuan will be the currency for all trades.

Nevertheless, several key issues remain unsettled. Yet to be decided are questions about accounting standards, listing requirements, share sale limits, and rules governing how raised funds can be used.

Indeed, there are plenty of controversies that could affect the launch of the international board, for which an official target startup date has not been announced. At worst, unsettled issues could park the project on the runway.

Longing to List

Tokuchi said up to six foreign companies have shown interest in listing on the Shanghai exchange. These include the banks HSBC and Standard Chartered, and the stock exchange NYSE. “It is very likely that they will list in the next two to three years,” he said.

Responding to a recent rumor that a red chip company would list on the Shanghai market this year, Tokuchi said that listing may be delayed until 2010. But he said the first company to list on the international board probably will be a red chip company.

A source tied to regulators told Caijing that a stable stock market could lead to a speed-up in preparations for red chip stocks now trading in Hong Kong to join the A-share market. Reportedly, these would include China Mobile and CNOOC.

Tokuchi predicted two to three companies, including red chips and foreign invested companies, would list on the Chinese stock market next year. Over the next five to six years, 20 to 30 companies will list. And within 15 years, he said, more than 100 mature companies will have listed on the Shanghai exchange.

According to Tokuchi’s analysis, foreign companies willing to list in Shanghai are mainly multinationals with fairly big stakes in China. Companies such as NYSE and HSBC aim to further integrate China into their global strategy maps.

However, some foreign companies are quite reserved about listing in Shanghai. Key reasons include listing requirements, fund-raising target rules, share price differences and delisting requirements.

Step By Step

The public first heard an official proposal for opening an international board in April 2007, when the Shanghai Stock Exchange released a Market Quality Report suggesting a new way for overseas companies to issue A shares.

CSRC released a draft regulation for a pilot program a month later, allowing overseas red chip companies to list on the A-share exchange. But for various reasons, the red chip A-share return plan was postponed two years.

Two years passed before the State Council confirmed that Shanghai would be promoted as an international center for finance and shipping – a move that brought the idea of an international board back to the table. After that, for the first time, CSRC and Shanghai exchange officials added the international board concept to the government’s working agenda. Last May, exchange chief Zhang publicly called for steadily advancing preparations for the international board.

Tu Guangshao, deputy mayor of Shanghai and former CSRC deputy chairman, later said overseas companies should be given access to the A-share exchange as part of the city’s long-term goal to build an international financial center.

Technical Bumps
Some technical issues, such as what kind of accounting standard should be used, market pricing and whether companies on the international board should be required to invest in China, are still being discussed.

Industry professionals say it’s unrealistic to require companies to comply with certain Chinese bookkeeping rules. “It is too costly for an international company with assets all over the world to comply with Chinese auditing standard,” said Zhu Junwei, general manager of capital markets with UBS Securities.

Changing to Chinese from international accounting could cost a company from US$ 5 million to more than US$ 10 million. “This is not even a one-time charge,” Zhu said. “Every year, a listed company would have to pay auditing fees.”

A senior executive at a securities firm, who asked not to be named, said international board listings should not follow in the footsteps of so-called panda bonds — yuan-denominated bonds issued by foreign companies in China.

Friction was apparent in October 2005 when International Finance Corp. (IFC) issued 1.13 billion yuan in pandas, and the Asia Development Bank used the bonds to raise 1 billion yuan. Both offered the bonds on interbank markets.

Neither issuer would accept a Chinese regulation requiring panda bonds to comply with Chinese accounting standards. After lengthy negotiations, IFC and the bank were exempted from the accounting rule and allowed to follow international credit rating and accounting standards. But they paid a price: Their bond offers were postponed several times by regulators.

Zhang recently told Caijing, “Listed companies on the international board should comply with Chinese regulations.” But he also noted that, as the nation’s corporate and securities laws currently only apply to domestic companies, the legal framework should be restructured for foreign companies that want to list A shares.

Other technical challenges surround IPOs. Lou Gang, a China strategist with Morgan Stanley, said launching an international board would test the current system for launching IPOs.

“With too much intervention by the government, listing access has become an asset,” Lou said, adding that the current review and approval procedure has become an obvious obstacle.

China could learn from its neighbor Japan, which set up an international board in the 1980s. By 1991, up to 131 foreign companies had listed on the Tokyo Stock Exchange.

Later, with the collapse of an asset bubble, many foreign companies delisted. And in April 2004, the Tokyo exchange canceled its foreign division. It then gave foreign and domestic companies equal rights and status.

Chen Changjie, an attorney with local law firm Guangda, said Japan’s international board failed due to a complex, tedious review and approval process.

Another issue for architects of a Chinese international board is that the proposal has intensified competition between Shanghai and Hong Kong.

“This affects the status of Hong Kong and Shanghai, and which one is more important,” said a Beijing-based securities executive. “In the environment, in which the yuan currency is not exchangeable, Shanghai can hardly be called an international financial center.

“All these issues are not easily resolved in the short term,” said Lou. “So the international board does not present a rosy picture.”

Source: Caijing Magazine, 15.10.2009 by staff reporters Fan Junli and Shen Hu

Filed under: China, Exchanges, News, , , , , , , , , , , , , ,

Tokyo Stock Exchange launches new Tdex+ options trading platform

Tokyo Stock Exchange, Inc. (“TSE”) is pleased to announce today the successful launch of “Tdex+ System”, a new trading platform for options contracts. Tdex+ System is the advanced electronic trading system based on LIFFE CONNECT®, which has been used by NYSE Liffe , the largest European derivatives exchange by trading value, and is highly rated for its performance and functionality by investors worldwide. With the introduction of Tdex+ System, order processing performance is dramatically improved to 6 milliseconds of order response* and about 20 thousand transactions per second. Functionality for strategy trades is enhanced as well.

In addition to this, TSE also introduced the Market Maker scheme for all listed options contracts today. Market makers started to quote bid and offer continuously for not only Options on JGB Futures, which have already high liquidity, but also Equity Options.

Atsushi Saito, President and CEO of Tokyo Stock Exchange Group, Inc. said “Today’s launch of Tdex+ System is the first step to further develop the TSE options market. The introduction of the Market Maker scheme provides investors the opportunity to trade Japanese options contracts in a highly transparent exchange market. I strongly believe that development of options market enhances the possibilities of alternative investments on Japanese financial markets, and greatly contributes to make Japanese markets more attractive. TSE will continue to make every effort to establish efficient and convenient markets for investors around the globe in the future.”

“NYSE Euronext is privileged to play an important role in the TSE’s Tdex+ System,” said Duncan L. Niederauer, CEO, NYSE Euronext.”Today’s launch of Tdex+ is the culmination of a year long endeavor involving both business and technology teams from NYSE Euronext working in partnership with the TSE.Technology provides the foundation for future business co-operation between our two organizations, and we are committed to doing our part to deliver significant benefit and value to the TSE and its customers.”

Source: Finextra, 05.10.2009

Filed under: Asia, Exchanges, Japan, News, Trading Technology, , , , , , , , ,

Exchanges in a Race to Zero Latency

Nasdaq OMX Group said earlier this month that upgrades to its technology have made it the fastest exchange in the world. That may or may not be true but regardless, the exchange operator’s announcement highlights a drive this year by market centers to reduce the latency of their systems.

Behind the trend is the desire to appeal to such latency-sensitive traders as direct market access and algorithmic players. These folks which include high-frequency traders, bulge bracket prop desks and the electronic trading departments of large broker-dealers want their orders processed as quickly as possible.

“If we’re not building a low latency competitive exchange, we’re just not going to be in the game,” Brian Hyndman, senior vice president for transaction services at Nasdaq, said at last week’s Aite Group conference on high-frequency trading.

Nasdaq reported on September 9 that upgrades to its INET platform and other parts of the technology that underlie five of its trading venues have given Nasdaq an average latency of less than 250 microseconds. That’s faster than BATS Exchange, which pioneered low latency trading. BATS announced in June it executes 80 percent of its orders in under 400 microseconds.

The upshot, according to Hyndman, is that latency has gone down, throughput has gone up and order acknowledgement times are more consistent. “We eliminated the outliers,” Hyndman said. “That’s very important to a lot of Nasdaq’s customers.”

This means, Hyndman explains, that a trader won’t get an order acknowledgement in 250 microseconds on one trade and three milliseconds another time. “There will be no big spikes in standard deviation,” the executive said.

(One millisecond equals one thousandth of a second. One microsecond equals one millionth of a second.)

Besides the changes to INET, whose main feature is the order-matching engine, Nasdaq also upgraded its network to 40 gigabits per second from a 10-gigabit connection; upgraded its hardware; and made a variety of other changes.

Nasdaq’s announcement was just the latest. Ever since June, all five of the major U.S. trading venues as well as one in Canada have put out notices describing the steps they have taken to cut their processing times.

On the same day Nasdaq made its announcement, Chi-X Canada ATS, owned by Instinet, claimed it was the fastest market center in Canada.

The ECN said it boosted its capacity to be able to handle 175,000 messages per second, a 500 percent increase from previous capacity of 30,000 messages per second. Chi-X Canada has benchmarked its average response time for marketable immediate-or-cancel orders at about 350 microseconds. That’s at least 10 times faster than any other major Canadian market center, it contends. Previously, Chi-X Canada’s internal latency was pegged at 890 milliseconds.

“We need to keep up with our customers,” Tal Cohen, Chi-X Canada’s chief executive, said. “The drive for latency is not slowing down anytime soon.”

Chi-X Canada, based on the same technology as Chi-X Europe, launched in February 2008. Cohen said part of Chi-X’s strategy to drive latency lower is to run the system on “commodity” hardware. That way, the ATS can simply plug in the newer and faster boxes once they become available.

Both BATS and NYSE Arca also announced latency reductions this summer. BATS cut its average latency, or the amount of time it takes to execute an order, by 50 microseconds to 395 milliseconds. It also announced that it can now convert an order into a quote for transmission on its market data feed in 631 microseconds.

NYSE Arca, a unit of NYSE Euronext, announced that its order acknowledgement time, the time it takes to confirm receipt of an order, had been reduced to under one millisecond for Tape A and Tape B names and under 650 microseconds for Tape C issues.

Perhaps the summer’s most symbolic announcement came from NYSE Arca’s sister exchange. The New York Stock Exchange said in July it scrapped its 33-year-old SuperDOT platform order delivery and processing system, as well as an internal routing system called Post Support System. In its place, the NYSE installed its Super Display Book system, technology based on NYSE Arca’s trading engine.

The move cut the time it takes to execute an order from 105 milliseconds to five milliseconds, according to the exchange. That’s down from 350 milliseconds in 2007. NYSE customers now get order and cancellation acknowledgements in two milliseconds, the NYSE added.

Five milliseconds is a far cry from Nasdaq’s 250 microseconds, and NYSE executives acknowledge they still have work to do. Still, the rollout this summer of the Super Display Book system was the culmination of an 18-month project that saw the Big Board completely reengineer its underlying hardware and software architecture using technology it acquired with the purchases of Euronext, Wombat Financial Software and Archipelago. The NYSE completely replaced its order entry, order database and routing systems, market data systems and pieces of its post-trade system.

The move to revamp its dated infrastructure potentially opens doors that were previously shut to the NYSE. At least one bulge shop refused to send any of its algorithmic flow to the NYSE because it was too slow, an NYSE exec told Traders Magazine.

On the other side of the Hudson River in Jersey City, N.J., technicians at DirectEdge ECN have also been ripping out old and installing new technology.

DirectEdge has seen its share of trading volume shoot from about 5 percent a year ago to about 12 percent today. To deal with the increase in messages flowing through its systems and prepare for the future, the ECN chose to replace its messaging middleware, TIBCO. It chose faster technology from 29West, a relative newcomer to the business. DirectEdge says installation of 29West’s technology has produced a “dramatic reduction in overall system latency” and increased its throughput.

“It allows us to use persistent messaging without the penalty,” said Steve Bonanno, DirectEdge’s chief technology officer. Persistent messaging is typically slower than non-persistent messaging, but offers guaranteed delivery. No messages are lost as they can be with non-persistent messaging. 29West’s technology eliminates that latency “penalty,” Bonanno explained.

DirectEdge is now able to guarantee its customers an order response time of 300 to 500 microseconds. That’s measured from the time the order enters DirectEdge’s gateway to the time the acknowledgment hits the gateway. Previously, response times of DirectEdge’s three trading platforms were in the 1.2- to 1.5-millisecond range.
Although DirectEdge needed the changeover to 29West primarily for throughput, it couldn’t ignore latency. “Speed is the toll you have to pay to be in this business,” Bonanno said. “Being fast is a given. That has to be there.”

All things are relative, of course, and speed is no different. Market centers are forever engaged in a ferocious battle with each other to win market share. In their desire to impress traders, they will often put out overly rosy latency numbers, critics charge. “There is a lot of confusion, and, in some cases, obfuscation about the actual latency at the venues,” said Donal Byrne, chief executive of Corvil, a Dublin, Ireland-based maker of latency monitoring and management tools. “It is impossible to make apples-to-apples comparisons.”

That applies to both the speed at which the venues disseminate market data as well as the speed at which they convert orders into trades, Byrne added. The problem is that the venues typically offer up an average number, which may be of little use. “If you measure it at one time, you get one number,” Byrne said. “If you measure it a few seconds later, you get another.” He believes trading venues should publish a schedule of numbers for all times during the trading day.

Doug Kittelsen, chief technology officer of execution management vendor FTEN, is also concerned. He believes exchanges should quote their latency data in the 95th percentile, or at the slow end of the spectrum, rather than the median or average, which is standard. “You want to see what the curve is like all the way through to the end,” Kittelsen said, “not just the middle.”

Source: Traders Magazin: 25.09.2009

Filed under: Data Management, Exchanges, Market Data, News, Trading Technology, , , , , , , , , ,

Market data rivals battle for share of wallet as terminal sales wilt

In an unprecedented announcement, Bloomberg has admitted to a fall in terminal numbers, revealing a four per cent drop from November last year. The statement was released late Tuesday, the day before the publication of second quarter 2009 results from Thomson Reuters, which highlight the positive outlook in the diversified vendor’s non-financial services professional division.

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Challenging Year for Thomson Reuters, Bloomberg and Financial Information/analysis Market, 17.02.2009

For the fixed income market the Bloomberg terminal has long been a required market data expense. However, in the current economic environment many banks, in an effort to reduce costs, have been systematically routing out unused, redundant, or not-exactly-required, expensive Bloomberg Terminals.

There is a cottage industry of third party services which offer banks software to monitor the network specifically for unused Bloomberg data. This March, Societe Generale signed an agreement with Nyse Technologies to use its Data Access and Reporting Tools (Dart) Usage Analysis for Bloomberg terminals as part of its market data cost reduction programme.

Bloomberg told the Financial Times that its total terminal numbers fell by 11,470, or four per cent from a peak last November of 268,800. Sales of the black screens had been growing at 25,000-30,000 a year. The fall in terminal numbers has caused Bloomberg to make one-off payments to staff whose pay packages would otherwise have come in more than 20 per cent below expectations. The certificates it gives employees in place of share options, are valued by the rises and falls with net terminal installations.

The FT reports that in a presentation to employees yesterday, Bloomberg blamed “removals” by large firms for the fall in terminal numbers. However, the vendor also said the losses were offset by strong order flow from “tier two and tier three broker-dealers” and smaller hedge fund start-ups.

For the past few years Bloomberg has been fighting the conception that the Terminal is merely for use by bond traders; fielding account managers to train bank customers in the full line up of functions and instruments available within the Bloomberg system. The vendor has been using that same strategy to fight against removals in the name of cost cutting.

Bloomberg also said at the employee presentation that revenues over the past 12 months have risen, from $5.8 billion to $6.2 billion. This might be a result of the long subscription times required of Bloomberg clients.

Meanwhile, Thomson Reuters posted $3.3 billion in revenue for ongoing businesses across the group for the three months ending June 30, 2009.

However, while Thomson Reuters Professional Division, consisting of legal, tax & accounting and healthcare & science posted positive results, the core markets division showed a seven per cent decline. The division, which consists of sales & trading, investment & advisory, enterprise and media, reported revenue of $1.9 billion for the three months ending 30 June, 2009, down from the $2.1 billion posted in the year earlier period.

Despite the drop in overall revenue, Thomson Reuters enterprise division rose seven per cent against strong results from a year ago, when organic revenues grew 14%. Enterprise sales continue to benefit from strong customer demand for reference data, independently validated pricing services and data to automate front, middle, and back office applications.

Revenues for sales & trading decreased one per cent due to lower foreign exchange transaction volumes, a six per cent decline in recoveries and a drop-off in desktop sales, offset by growth in commodities & energy and Tradeweb.

Revenues for investment & advisory were unchanged for the quarter. However, the vendor reported a high demand for ThomsonOne.com among mid-sized and boutique investment banks.

CEO Tom Glocer comments: “Our revenues continued to grow in both the professional and markets divisions, which is a testament not only to the choice and balance of the markets in which we operate, but also the strength of our franchises in the challenging financial services and legal segments.”

Filed under: Data Management, Data Vendor, Market Data, News, , , , , , , ,

Market Data Platforms: Infrastructur to Handel Data Challanges – Report by A-TEAM July 2009

An exponential expansion of market data volumes in recent years has been caused by the confluence of a number of technology and business drivers – from the emergence of electronic communication networks (ECNs) to the advent of smart order routing systems and algorithmic trading engines.

Download:MARKET_DATA_PLATFORMS_Infrastructure_to_Handle_Your_Data_Challenges

Coupled with the increasingly divergent data sets needed to support complex decision systems, there is now a requirement for high performance data management infrastructures throughout the enterprise supporting high frequency automated trading as well as traditional market data processing functions like securities master file updates, risk analysis, and back-office trade support. Read full article

Source: A-Team and NYSE Technology, 30.06.2009

Filed under: Data Management, Library, Market Data, News, Reference Data, , , , , , , , , , ,

Carbon Trading Market Creating Opportunities

Continued growth in the global carbon trading market and the anticipated adoption of a U.S. climate control bill is creating plenty of new opportunities for investment banks, nascent exchanges, technology vendors and asset servicing agents in the trading and post-trade arenas.

The carbon emissions market, which grew 75 percent to reach $116 billion in 2008 from the prior year, could expand to $2 trillion by 2020 should more markets adopt a version of Europe’s “cap and trade” model for reducing greenhouse gas emissions, according to research firm Celent.

Based on the 1997 Kyoto Protocol, an international treaty, the European Emissions Trading Scheme allows for members of the European Union to create tradable European Emissions Allowances (EUAs) and Certified Emission Reduction Credits (CERs)–otherwise known as offsets. Other countries such as Australia, New Zealand, Canada and Japan are also pursuing their own versions of carbon cap and trade models as is the United States.

“The potential for carbon trading is great, as is the opportunity cost of ignoring the market,” said Stephen Bruel, research director for TowerGroup. Even more lucrative than trading will be advisory services to help energy firms comply with divergent regulations to reduce carbon emissions, he believes. Harmonization between regulatory regimes to create a unified global market, while ideal, is a long way off.

“It is costly for global firms to comply with the patchwork emission schemes and investment banks can help carbon emitter clients navigate this minefield with offset strategies,” said Bruel, citing BNP Paribas, Goldman Sachs and Credit Suisse as examples of firms with specialized carbon risk desks. Hedge funds, he predicted, will also want to capitalize on the arbitrage opportunities between regulatory regimes and will use algorithms to take advantage of the correlations between the price of coal or weather patterns and the price of carbon.

Although much of the trading activity and innovation in the carbon emissions market remains in Europe, where the European Climate Exchange and Bluenext are the largest exchanges, the potential passage of U.S. legislation later this year or in 2010 could easily make the U.S. the largest regulated carbon market.

Under the proposed American Clean Energy and Security Act, the ceiling on greenhouse gas emissions would be divided into billions of permits, each conferring the right to emit one metric ton of carbon dioxide. Fewer permits would be issued to utilities, manufacturers and refiners each year until emissions are 83 percent by 2050 over 2005 levels.

It is unclear what effect the legislation, if passed, would have on several voluntary regional and state projects which have already cropped up, creating emission offset contracts traded over-the-counter, largely through interdealer brokers and web-based mechanisms.

“Trading volumes will continue to expand in the over-the-counter market but U.S. legislation will likely favor exchange-traded contracts and several more exchanges could emerge,” said Jubin Pejman, vice president in the Americas for Trayport, an electronic trading software firm purchased by interdealer broker GFI last year. Exchange-traded contracts are typically standardized and cleared through a centralized facility, which reduces counterparty risk–a key mantra of the new Obama administration for the over-the-counter market.

Three fledgling U.S. emissions exchanges–the Chicago Climate Exchange, its sister company Chicago Climate Futures Exchange and rival Green Exchange, stand to benefit the most from any federal mandate. The CCX, launched in 2003 as a voluntary market with binding targets, offers participants a way to buy and sell “carbon financial instruments” (CFIs) that represent a certain level of emissions reductions; the CCX overtook the over-the-counter market for the first time last year.

The rival Green Exchange created in December 2007, by a consortium of trading firms and the New York Mercantile Exchange (Nymex), is awaiting approval from the Commodity Futures Trading Commission as a designated contract market. Its contracts are already listed for trading and clearing on Nymex.

Pejman said that Trayport’s GlobalVision Broker Trading System, a screen-based network, is scaleable enough for broker dealers to expand their message traffic on bid and offers in the over-the-counter market for carbon emission allowances and credits in the U.S.The firm’s GlobalVision Trading Gateway, which enables traders to trade on multiple liquidity pools through a single user interface, will also link to the Green Exchange, should the market win CFTC approval.

Software vendors with cross-asset capabilities are also finding fertile territory in adding functionality for carbon emission contracts. SunGard has enhanced its GL Clearvision middle office and GL Ubix back-office products–inherited through the 2008 acquisition of GL Trade–for trades executed on Bluenext, a Paris-headquartered exchange majority-owned by NYSE Euronext.

Mark Stugart, product manager of commodities for Calypso Technology, a trading and risk management softwar firm, said that his firm will upgrade its platform to incorporate trade capture, pricing and P&L calculations for EUAs and CERs on the ECX and BlueNext by year end.

Last month, Bank of New York Mellon launched a centralized custody and trade settlement platform called GEM to give customers a single view of their entire carbon portfolio–for regulated and voluntary markets–and perform all transactions including trading, cancellation and retirement of contracts in one place.

Original Article

Source:Securities Industry News, 22.06.2009 by Chris Kentouris

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World’s Biggest Carbon Offset Exchange Comes One Step Closer To Reality As NYSE’s BlueNext And China-Beijing Environmental Exchange Sign China Partnership

Surprising Green Energy Investment Trends Found Worldwide

Worldbank: State and Trends of the Carbon Market 2009


Filed under: Asia, Australia, Energy & Environment, Exchanges, Korea, News, Trading Technology, , , , , , , , , , , , , , ,

World’s Biggest Carbon Offset Exchange Comes One Step Closer To Reality As NYSE’s BlueNext And China-Beijing Environmental Exchange Sign China Partnership

NYSE Euronext (NYX) today announced that BlueNext, its majority-owned environmental trading exchange, is partnering with the China-Beijing Environmental Exchange (CBEEX), the first state-level Chinese environmental rights trading platform, to set up an international carbon-trading related information platform.

Bluenext, the world’s largest “spot” trader of carbon credits supported by the world’s leading and most liquid exchange group, operates the world’s largest spot market for Certified Emissions Reductions (CERs). CBEEX is the gateway to China , the world’s largest market for Clean Development Mechanism (CDM) projects.

At an official signing ceremony today in Beijing , BlueNext and CBEEX signed an agreement that includes:

  • A cross-marketing partnership;
  • A comprehensive data sharing agreement that will promote investment- and buyer information of Clean Development Mechanism (CDM) projects in China ;
  • BlueNext sharing its deep understanding of environmental trading knowledge and expertise with CBEEX to grow both markets internationally.

“This is another step in our wish to expand our market into the great potential that is China, and the rest of Asia; but also another step in our long held ambition to be the reference point for a single international price for carbon,” said Serge Harry, Chairman and CEO of BlueNext.

“NYSE’s Bluenext, as an American European company, is ideally placed to open up access to the largest buyers of CDM projects and CERs in the European and American markets,” said Darwin Zheng of CBEEX.

For background about CDM and CERs, please see the below.

Background about CDMs and CERs:

What is the CDM?

The Clean Development Mechanism (CDM) creates credits, Certified Emission Reductions (CERs), from emission abatement projects in developing countries.  CERs can be used for compliance in the European Emissions Trading Scheme (EU ETS) and other national schemes, such as in Canada and Japan .

Key Facts about CDM / CERs in China

  • China had 84% market share in 2008 for the Primary CDM market
  • Between 2002-2008, China accounted for 66% of all contracted CDM supply in the market
  • From January 2008 to March 2009, the CDM pipeline in China grew steadily to about 1730 projects
  • 800 Chinese projects entered the pipeline since January

Key Facts about CERs on Bluenext

  • Price of CER Spot on Bluenext 16.6.09 – 10.75 Euros / Tonne ($14.89)
  • Total volume of CER spots since August 2008 – 24 114 000 tonnes

Source: MondoVisione, 18.06.2009

Filed under: China, Energy & Environment, Exchanges, News, Risk Management, , , , , , , , , ,

Exchanges Rally To 2009 High On Hopes Of Increased Regulation – FTSE Mondo Visione Exchanges Index Up By 27 Per Cent In May 2009

The value of listed exchanges rose by 27 per cent in May 2009, building on the previous two months’ rallies and again demonstrating further evidence of confidence returning to the industry.

Closing at 22187.70 on 29 May 2009, the Mondo Visione Exchanges Index, which aims to reflect market sentiment and is a key indicator of exchanges performance, has climbed back to a level not seen since early October 2008. Year to date, the index has increased by 40.6 per cent.

Last month, 17 of the 18 listed exchanges on the Mondo Visione Exchanges Index saw their values raised.

Herbie Skeete, Managing Director, Mondo Visione and also Co-founder of the Index said:

“Shares of listed exchanges are up across the board from their lows of 2008. Derivatives markets are leading the pack, in-part on hopes that the US and European regulators plan to regulate over-the-counter derivatives, which could help exchanges and hurt the dealers who have fought hard to keep their opaque market private.

These changes in regulation should help fuel growth for exchange operators, particularly those who have the capacity to provide clearing services.

But there is one potential problem looming for the integrated exchanges and the derivative exchanges in particular, and this is the threat by regulators to force separation of clearing from trading. At the moment the threat is a small cloud on the horizon – it may blow away or it may turn into a serious storm.”

The FTSE Mondo Visione Exchanges Index best performer by capital returns in US dollars was CME Group with a 45.3 per cent increase in share price from 30 April 2009 to 29 May 2009.

The FTSE Mondo Visione Exchanges Index worst performer by capital returns in US dollars was Johannesburg Stock Exchange a 0.2 per cent decrease in share price from 30 April 2009 to 29 May 2009.

Download: May 2009 – FTSE Mondo Visione Exchanges Index Report

Source: MondoVisione, 15.06.2009

Filed under: Australia, BM&FBOVESPA, BMV - Mexico, Brazil, Exchanges, Hong Kong, Japan, Mexico, News, Singapore, , , , , , , , , , , , , , , , ,

ITAU Securities Selects NYSE Technologies To Create New Direct Market Access Platform – First Global Electronic Trading Platform To Offer Access To Brazilian Markets

NYSE Euronext (NYX) and Itau Securities today announced that NYSE Technologies, the commercial technology division of NYSE Euronext, has been selected to develop a next-generation electronic trading platform that will allow Itau Securities’ customers around the world to send orders directly to Brazil’s BM&F Bovespa market center.

Making them the first to offer Direct Market Access (DMA) connectivity to BM&F Bovespa. Itau Securities and NYSE Technologies will work together to implement a best-in-class technology solution that combines comprehensive hosting software with an integrated back office platform utilizing the super-fast, resilient SFTI network.

“We are excited to work with Brazil ’s leading capital markets firm on a truly ground-breaking project that further opens the Latin American marketplaces to the global investors – and puts the global markets within reach of the Brazilian investors” said Stanley Young, CEO, NYSE Technologies and Co-Global CIO, NYSE Euronext.

“With our industry-leading technology and Itau’s extensive customer relationships in the Americas , Europe, the Middle East and Asia, we will be implementing a new breed of direct market access solutions unlike anything currently available in Latin America .”

“As we continue our global expansion to London, Dubai, Hong Kong and Tokyo, Itau Securities is working with NYSE Euronext to build this new platform giving us the ability to offer our customers outside Latin America a robust, innovative trading solution for trading in our markets,” said Roberto Nishikawa, CEO of Itau Securities.

“Moreover, Itau’s clients will have access to the most complete provider of investment services for the Brazilian market – from custody to asset management, foreign exchange, research for equities, derivatives and fixed income products.”

Source: MondoVisione, 04.02.2009

Filed under: Brazil, FIX Connectivity, News, Trading Technology, , , , , , , , , , , , , ,