FOCUS FINANCIAL MARKETS
Issue 8, Feb/Mar 10
Continued from page 25... looking toward that longer-term requirement.”
Nasdaq uses Verizon data centers to host its exchange infrastructure, as well as provide colocation services with connectivity to its exchanges.
Growth in demand for connectivity has to be satisfi ed as well, and Verizon has a policy that leaves a lot of headroom to ensure extra bandwidth is there when Nasdaq needs it.
“When we have utilisation over 30%, we continue to upgrade that bandwidth,” says Jan Claeson, Verizon’s sales director for the Nordics.
FULL RANGE OF SOLUTIONS Another characteristic of today’s fi nancial service customers is the demand for a full range of solutions from the data center service provider. Besides offering complete management of customer infrastructure within Savvis data centers, TR will provide help to clients’ development teams with integrating their applications with the host.
“They’re looking for a plug-and-play scenario, where they can take any work they’ve done in terms of coding applications and turbo-charge these applications with low latency data,” says Ruvo. “Plug-and-play and compatibility play a key role in the success we’ve had.”
In an effort to leverage the demand for full- service solutions, data center provider Telx recently combined its numerous offerings for fi nancial fi rms into one product – Financial Business Exchange.
The offering provides colocation space, managed services and connectivity to all major exchanges at the company’s facilities in New York, New Jersey and Chicago.
“It really is a packaging of all the core products we offer,” says Telx director of product Nelson Frye. “Fully managed is a big part of that.”
FAST CONNECTIVITY AND DEPLOYMENT Clients in the high-frequency trading space require a lot more detailed and sophisticated information about latency than other types of data center clients, says Telx chief executive Eric Shepcaro. “How many hops between their location and other clients? They are very specifi c and will look for actual measurements.” Financial customers also require much quicker deployment than do others. “They
have faster requirements in implementation of services, particularly on the connectivity side,” Shepcaro says.
“We can implement a new physical-level cross connect in 24 hours and sometimes, if all the information is correct, we can even do it within four hours,” he says.
AWAITING FINAL WORD FROM US SEC The US Securities and Exchange Commission’s (SEC’s) ongoing inquiry into high-frequency algorithm-enabled trading has attracted a lot of attention.
Sources interviewed for this article were reluctant to comment at length on the commission’s review of their space, citing lack of defi nitive conclusions by the regulators.
The last action the SEC had taken in connection with the matter at the time the article was written was a proposal to ban “naked access”, or execution of unscreened trading orders. It allows for quicker execution than that of orders fi ltered by an automated system of checks.
Lawrence Leibowitz, group EVP and head of US execution for NYSE Euronext, says the exchanges supported the rule.
NYSE’s Young says that if the new rule were to be enacted, the company would benefi t from increased demand for its Risk Management Gateway product, a set of fi lters that enables brokers that provide sponsored access for clients to check if orders are placed in accordance with regulations and block questionable orders from reaching the markets.
Young says that most fi rms took “a very responsible attitude” toward making sure their systems played by the rules.
This January, NYSE fi ned one of its clients, Credit Suisse, for running an algorithm that blocked some exchange traffi c in November 2007. The exchange company says the penalty was issued to the client for lacklustre development and implementation of the application, according to news reports.
Verizon spokesman Kevin Irland says the company would make any changes necessary, if the SEC inquiry resulted in new regulations.
“With our position in the market, it’s something we monitor,” he says. “At the end of the day, we would want to make sure the services we offer to our customers are in accordance with any regulatory requirements.”
The agreements extend an existing 20-year relationship, under which Verizon Business provides the exchange with professional services, unified communications and corporate network services.
Specifically, Nasdaq is expanding its use of Verizon Business’ US data center colocation services to enhance its overall trading capabilities, and is in parallel transitioning its set of Nordic-based exchanges’ existing trading and market data access network to the Verizon Financial Networking solution (VFn) – a move that will allow trading and market data customers to select their carrier of choice.
“Verizon is a trusted partner that understands our business and has the global capabilities
Connectivity in the New York area
and beyond Fiber rollouts to exchanges and carrier hotels
Trading exchange Nasdaq has signed over day-to-day management of its US data centers to existing supplier Verizon as part of a colocation expansion strategy, where Nasdaq will use Verizon as a colocation supplier and also use Verizon to build out its own colocation offerings.
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