Competition among European execution venues and the resulting liquidity fragmentation have led to a need for new types of data feeds and routing capabilities. In December 2008 Fixnetix and Skyler launched Europe's first European consolidated direct feed ticker showing best bids and offers across all major European market venues, as well as the executed prices.
iX-Direct BBO is based on the Fixnetix ultra low latency direct market data feeds and the Skyler C3 liquidity discovery technology. It delivers aggregation speed and flexibility, sophisticated business logic, and ease of deployment.
The aggregated full depth order book feed provides insight into the entire liquidity available across all Europe's MTFs and major exchanges. Firms can trade a specific instrument on different sets of venues, dependent on their customer requests, while also being able to add or remove venues from their order book views in an ad hoc manner.
Efficiency is achieved by aggregating Level I and Level II direct market data feeds from the various exchanges and MTFs into a single European consolidated tape and quote feed, as well as an aggregated full depth order book feed. The iX-Direct BBO solution combines an ultra low latency direct feed solution with the microsecond order book aggregation services to deliver the absolute minimum latency and also - for the first time - provides our customers with additional differentiation based on their geographic position.
Because the service has been designed to work efficiently within a distributed architecture, the iX-Direct BBO solution effectively removes the physical geographical limitations that until now have prevented geography-specific best execution. Now using iX-Direct BBO, firms located in Germany can deliver on their best execution goals by ensuring that they can always achieve the best deals available in Germany, and the same will be true for organisations in the UK. iX-Direct BBO also ensures that orders can never be sent to an incorrect destination based on old data, and actively prevents the execution of trades at sub-optimal pricing. The result with iX-Direct BBO is that orders are always sent to the correct destination, ensuring timely order execution with no slippage.
The whole service is delivered as on-the-wire solution, which Fixnetix operates as a managed end-to-end service to ensure that customers always benefit from the performance advantages that result from best-of-breed technologies, without any of the complexity of implementing and running the service. Key elements include managing the symbology mapping and normalisation across the different venues and MTFs. The service is also engineered to ensure the highest reliability and availability and deliver reliable, actionable, and up-to-date data at all times.
The system also features embedded business logic to deal with different trading periods and states such as auction periods or halted books and ensures that downstream applications only receive the data they can act on. In addition, iX-Direct BBO constantly checks for data feed integrity and crossed or locked books. Furthermore, the hosted setup is architected to ensure high availability with multiple levels of failover mechanisms and feed source switching capabilities.
Finextra verdict: As MiFID rule changes led to a deterioration in the quality of information available to the market, there was a need for more consolidated information, like that available in the US market. Fixnetix and Skyler have taken an early lead in getting their feed to market, followed closely by a number of other independent and MTF-supplied feeds.