Plus Markets has signed for market data and connectivity systems from Algo Technologies, with a deal for the vendor's matching engine also in the pipeline, as part of a wide-ranging restructuring and cost-reduction exercise.
The trading technology vendor, founded earlier this year by former Chi-X Europe COO Hirander Misra, says it won competitive tenders to provide Plus with its AlgoData and AlgoSpan systems. A heads of terms deal has also been signed for the AlgoM2 matching engine.
AlgoData, an in-house developed, fully distributed low latency market data service replaces the exchange's existing Reuters offering, helping Plus to offer new products to the "latency sensitive trading community".
Meanwhile, BT's Radianz network connectivity is being dropped in favour of AlgoSpan to interconnect both Plus's data centres and other financial locations.
The vendor says its fibre optic network provides true 'fibre-to-the-trading-desktop' point-to-point connectivity between traders and exchanges with near-zero data latency.
Both systems are set to be rolled out this quarter as Plus replaces its core technology, supplied by Nasdaq OMX, with an in-house built quote and trade reporting facility, scheduled to go live during the fourth quarter.
In addition, a heads of terms deal has been inked to provide a new lit book supported by AlgoM2, which Algo Technologies says is the world's fastest matching engine with an independently verified 16 microsecond roundtrip transaction time.
Plus is planning to launch this platform in 2011 subject to the completion of a special purpose vehicle financing arrangement. The launch is conditional on Plus raising £10 million from potential users.
The overhaul - which includes plans for the launch of a new derivatives exchange - is aimed at re-inventing the small caps market player to compete directly with upscale venues such as Chi-X and the London Stock Exchange.
Cyril Theret, CEO, Plus, says: "Plus has recently completed a strategic review and we are extending our product offering, forging new partnerships, developing new products and building new markets. Algo's highly advanced technology will enable us to leapfrog established MTFs and Exchanges and provide the foundations for growth."
The technology upheaval is expected to help Plus reap savings of up to 40% of its operating costs. Costs for the year ended 31 December 2009 were £8.75 million and will be reduced to an annual level of below £5 million in 2011, after restructuring costs.
In a statement, the company says: "This reduction of costs by some 40% is being achieved partly through headcount reductions, which have already been completed, but principally through changing our core technology offering."