SunGard has launched an ultra low latency direct market access (DMA) service for pan-European equity markets through its European broker-dealer, Valdi Execution Services.
Valdi addresses the ultra low latency requirements of high-velocity traders, providing a broker-managed solution that includes clearing and settlement.
SunGard's Valdi Execution Services measures latency in microseconds, while maintaining high capacity, stability and resiliency. Customers can easily code to the service's FIX API for rapid time-to-market. The DMA access infrastructure is centrally deployed, and exchange co-location and distributed infrastructure are also available to help decrease latency and increase time-to- market. A pre-trade risk management layer is included, to help further reduce latency by eliminating hops in the transaction process.
The demand for ultra low-latency market access continues to grow, with US market volumes currently estimated to be comprised of 70% high frequency flow according to research firm Aite Group*. In Europe, Aite Group estimates that the current 25% volume share of high frequency trading will reach over 40% by 2012, and the adoption of algorithms and DMA is expected to increase to 70% during the same period. With the introduction of Valdi Execution Services' European DMA offering, SunGard is providing a solution that will help latency-sensitive firms reduce the time-to-market and infrastructure burdens that most firms encounter in entering new markets.
Initially, the new DMA offering will connect to the BATS and Chi-X MTFs, and will then extend its connectivity to Turquoise and the London Stock Exchange. Pan-European market access will also be offered following the initial deployment.
Sang Lee, a co-founder and managing partner at financial markets research and advisory firm Aite Group, said, "The European equity markets are characterized by increasing liquidity fragmentation, burdening trading and brokerage firms with rising operational and infrastructure costs in order to access liquidity. As a result, high frequency trading is expanding in Europe and the demand for low-latency market access continues to grow and more firms will look to utilize direct market access (DMA) to remain competitive."
Raj Mahajan, president of SunGard's trading business, said, "SunGard brings in-depth expertise to changing regulation, market structure and trading venues via our own memberships throughout Europe. Our neutrality and provision of integrated risk management tools within the Valdi ultra low latency DMA platform provide the competitive advantage high velocity traders need to help reduce latency and increase speed to market."