COLT, a leading European provider of business communications, and KVH Co. Ltd., headquartered in Minato-ku, Tokyo, announced today they are entering a partnership to support electronic trading applications in the global financial industry. KVH and COLT are already market leaders in proximity hosting and ultra low latency connectivity in their respective markets and are now joining forces to offer end-to-end solutions globally.
The services provided by the partners allow customers to host their servers in a secure environment in close proximity to the exchanges they are trading on, coupled with the highest transmission speed possible. Together with KVH, COLT can now offer financial organisations a solution which increases their competitiveness. COLT and KVH's Proximity Hosting solutions offer physical presence in close proximity to major exchanges throughout Europe, United States and Asia, giving customers low latency access to key financial markets such as London, New York, Tokyo, Frankfurt, Chicago, Paris and Zurich.
Speed is recognised as the key differentiator in today's trading environment. The adoption of new algorithmic trading systems where computer-programmed algorithms react automatically to fluctuations in the market means low latency is even more critical. A delay in the network of just one millisecond will significantly influence the margins that financial institutions are trading at and the profit they are making from their trades.
Increased competitive advantage
"COLT recognises that network latency and very close proximity of trading infrastructure is at the heart of critical activities such as trading, order management, transaction processing and liquidity management," said Detlef Spang, Managing Director for the Major Enterprise Division of COLT. "The closer we can get our customers to the venues they are trading on, the more they will increase their competitive advantage.
"Through this partnership, COLT and KVH are able to cover key financial markets in Europe, the US, Japan and other Asia-Pacific regions, where major exchanges are located. Going forward, together with KVH, we will support European and US institutional investors as they enter the Asian market, offering them low latency and proximity services with full end-to-end service management," he added.
"Despite the global financial crisis continuing, the need for high speed elgh speed electronic trading continues to increase. Low latency networking has therefore become an extremely important competitive parameter in the global financial industry. In partnership with COLT, KVH expects to accelerate the low latency trading and help increase liquidity in the market," said Ms. Miyuki Suzuki, President and CEO of KVH.
A survey carried out by COLT earlier this year among leading investment banks showed that reduction of delay in the networks was considered critical for the electronic trading.