The London Stock Exchange is to start letting third party vendors co-locate at its data centre as it bids to cash in on increasingly valuable high-frequency trading business.
The LSE formally launched its Exchange Hosting service last September, providing high-frequency algorithmic trading firms with microsecond access to its markets, allowing them to physically locate their servers as close as possible to the exchange's matching engines.
Now, following detailed consultation, the exchange is also allowing non-trading market participants to take their own cabinets within the hosting facility, releasing additional space at its central London centre at the end of November to accommodate them.
The LSE says non-trading participants will be able to use the space to centrally redistribute market data to the high-frequency trading clients located within the data centre.
Third party vendors may also install and manage a trading participant's hosting system, offering a fully managed end-to end-service, and connect to multiple trading firms to centrally provide software.
In addition, the exchange suggests vendors can provide connectivity to trading and information services for the distribution of market data to clients located outside of the facility.
Antoine Shagoury, CIO, LSE, says: "This is another significant step forward in our efforts to enhance the Exchange Hosting service. Our ever expanding community of trading customers will directly benefit from this vendor diversification and the innovative, value added services and products these new non-trading participants will bring to our co-location environment."