SWX re-vamps infrastructure for algo trading
05 July 2007 | 4888 views | 0
SWX Swiss Exchange and its screen-based market operator virt-x have begun the first phase of a three year infrastructure upgrade programme intended to cater for increased demand for direct market access (DMA) and algorithmic trading.
The SWX says the low latency trading platform is 10 times faster than its previous systems and provides at least 10 times more capacity.
The platform, which is based on technology that SWX initially used for trading in warrants and structured products, will be implemented in four stages over a three-year period, with trading of international bonds starting today. Equity trading is scheduled to follow by the summer of 2008.
Industry-standard interfaces for order routing, trade reporting and market data will also be implemented next year, while the migration of off-book services and trade processing will take place in 2009 and 2010.
Jim Gollan, chairman of virt-x, says the trading re-vamp is in response to requests for greater transaction capacity and lower latency from members.
"This latest development in the evolution of our trading services provides a high performance and cost effective offering for our members to capitalise on an increasingly automated market," he adds.
In addition to the enhanced capacity and speed, SWX says it will review its tariff structure for 2008.
It's the latest in a series of moves by Europe's exchanges to reposition their trading platforms for a new era of automated trading.
Swiss-German derivatives exchange Eurex said in December that it was upgrading its trading infrastructure and introducing price discounts in order to cater for the rise in the use of algorithmic dealing systems.
Last month the London Stock Exchange (LSE) launched its TradElect platform which is designed to increase capacity at the exchange fivefold and speed up order processing. The platform is also expected to capture more orders from hedge funds and investment banks running algorithmic trading systems.
Meanwhile Deutsche Börse has teamed with Colt and IXEurope over the past year in order to introduce 'proximity services' that provide customers with low latency access to its execution venues and market data streams. The proximity services facilitate algorithmic and program trading by allowing financial trading firms to place order management systems as close as possible to Deutsche Börse's trading infrastructure.
OMX similarly has outlined plans to revamp its trade execution and reporting systems ahead of the introduction of the Markets in Financial Instruments Directive (MiFID) later this year.