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JSE opens colocation centre

14 May 2014  |  1731 views  |  0 Source: Johannesburg Stock Exchange

The Johannesburg Stock Exchange (JSE) successfully launched its colocation centre on Monday 12 May 2014, which allows JSE clients to place their trading equipment in the JSE data centre and allow for the fastest access to all JSE markets.

The JSE's colocation centre, which is located on the JSE premises, will provide clients with the lowest latency connectivity for trading and the receipt of real-time data. Colocation will provide clients with a roundtrip latency of 150 microseconds compared to the existing 2550 microseconds it takes for clients who are in Sandton.

"Clients demand faster execution speeds and exchanges need to offer these in order to compete. Aside from faster trading speeds and updates to market data which will allow for enhanced response to market movements and deployment of new trading strategies, colocation also reduces the cost of bandwidth for clients. It also improves trading resilience as clients are in the JSE's data centre and reduces clients' dependence on network providers. Apart from the benefits to clients, colocation will open up a new revenue stream for the JSE," says Leanne Parsons, Director: Equity Market at the JSE.

Demand for colocation has come from JSE members, their clients, data vendors, managed service providers and shared infrastructure providers both locally and internationally. Most international demand comes from firms based in the UK. The pricing of colocation will be the same for all clients using the facility.

Riaan Van Wamelen, Chief Information Officer at the JSE says "The colocation centre will initially provide space, power, cooling, and physical security for 35 hosting units for clients' computers. The colocation centre design is based on a Tier III design which is optimised to conserve efficiencies in energy and cooling. The JSE colocation data centre has been configured to ensure that all clients experience the same speeds on the JSE colocation network."

"The JSE's colocation centre levels the latency playing field for members especially those located geographically far away from the exchange. It has been built on lessons learnt from other markets, with a non-exclusive hosting unit leasing policy and the same public data feed availaailable to all clients, whether collocated or not. Faster trading has measurable beneficial impacts on a variety of core market quality metrics including tighter spreads, increased liquidity and more efficient price formation, amongst others, for JSE clients. JSE systems are robust and the JSE has excellent surveillance capabilities. Faster trading speeds have demanded that exchanges, the JSE included, develop new risk management practices to enhance the integrity and stability of the market," concludes Leanne Parsons.

To accommodate the colocation capacity requirements, the existing equity market trading solution, powered by MillenniumIT software has been upgraded and the whole market will now benefit from an improved matching engine speed of approximately 100 microseconds.

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