The international derivatives exchange Eurex successfully launched its new system Release 12 on Monday.
Among the most important changes coming with the release are two links to other international exchanges, further significant improvements in clearing, new functionalities for trading, and partly new programmed software components to further reduce latency.
Release 12 lays the technological foundation for two important partnerships, the Eurex/ISE link and the link between the Korean Exchange (KRX) and Eurex. The Eurex/ISE link will provide Eurex participants with access to ISE's product range, pending approval by the US supervisory authority, the Securities and Exchange Commission (SEC). The Eurex/KRX link will enable Eurex clients to trade the KOSPI 200 option after Korean trading hours via their existing access as of the beginning of 2010.
In Release 12, Eurex also addresses continued acceleration in trading by converting to real-time risk management. As of March 2010, the Enhanced Risk Solution interface will be available to all Eurex participants. The Enhanced Risk Solution will inform every member of its positions (number of contracts) and corresponding risk exposure (margin requirements) in real time. General Clearing Members (GCM) currently receive information on their current aggregate risk position approximately every ten minutes. Future real-time risk management supplements the risk control functions launched during the past two years, e.g. the stop button. In case of emergency, all of a participant's orders and quotes can be deleted and entry of additional orders and quotes prevented by activating the stop button. The combination of these components offers Eurex customers optimized risk control with minimum latency and increases market stability.
In addition, Release 12 expands the trading functionalities. For the first time, OTC volatility strategies including the associated equity transactions leg can also be entered. The Multilateral Trade Registration functionality has also been further expanded; it enables participants to use Eurex Clearing's central counterparty service for OTC transactions in which multiple parties are involved.
The technical improvements of Release 12 include significantly reduced order and quote processing times as well as enhancements of the two high-speed interfaces Enhanced Transaction Solution and Enhanced Broadcast Solution. With Eurex Release 12, the daily average round trip times of futures orders for Eurex members located in proximity services have been reduced from approximately 5 milliseconds to approximately 2 milliseconds.
Like Releases 10 and 11, Release 12 is also a key milestone on the Eurex Technology Roadmap. This roadmap, which was launched in Q1 2006, bundles a variety of components for system optimization: software and hardware upgrades, launches of new offers and services, and the distribution of new, customizable data packages.
The Technology Roadmap is Eurex's response to current trends in electronic derivatives trading. Software-induced trading (algorithmic trading) and the increasing number of contracts result in a considerable rise in daily transaction volume. With the Technology Roadmap, Eurex anticipates these new challenges by adjusting the system on an ongoing basis. The aim is to increase trading speed and throughput, expand system performance and improve the distribution of real-time data, interfaces and risk management.