Rob Lane
Zak Graham
- Over the past 18 months, significant developments at exchanges have required low latency data teams at firms to burn the midnight oil to ensure implementation is completed by the exchanges’ deadlines.
- For example, the deadline for the Tokyo Stock Exchange’s Arrowhead 4.0 project is coming quickly, while other recent projects include FMX Futures Exchange, Borsa Italiana, TMX Group, and CBOE changes for multiple exchanges (Japan, Australia, NEO ITCH Canada).
- Data management teams need a low latency solutions partner that provides support for the multitude of changes to data feeds and feed handlers that requires test environments, weekend testing, and help with exchange readiness and compliance reporting.
Securities market exchanges are launching new instruments, technology platforms, data feeds and more, at a very rapid pace. For financial firms, these new offerings provide opportunities to generate both alpha and revenue. However, for many data management teams that support low latency data feeds or feed handlers, it is more challenging than ever to keep up. These teams need to understand, implement and then test the changes thoroughly before they go live and are used for production trading – this is often a daunting prospect.
Moreover, this work often needs to be completed out-of-hours or at weekends, times when vendor support for low latency data feeds and feed handlers can often be absent. This can result in significant operational risks, and risks to resilience, as financial firms struggle to fulfil the technology requirements needed by the “go live” deadline imposed by the exchange.
Exchanges go faster
The pace of change at trading venues seems to be accelerating. Exchanges are updating their underlying technology, adding new venues and platforms, transitioning to a different technology, and more. A sample of upcoming and recent changes that have impacted low latency data feeds and feed handlers includes:
- Arrowhead 4.0 – The Tokyo Stock Exchange is upgrading its cash equity trading system, Arrowhead, on November 5, 2024. The upgrade includes many changes. For example, it implements the new TSE trading rules of September 2023, created to strengthen the function of cash equity market.
- FMX Futures Exchange – This new electronic futures exchange went live with SOFR futures trading in September 2024, and plans to add US Treasury futures in the first quarter of 2025.
- Borsa Italiana – This exchange completed its migration to the Optiq trading platform in April 2024. This follows the acquisition of the exchange by Euronext.
- TMX Group – In November 2023, TMX launched a new Canadian trading platform consisting of two order books, Alpha-X and Alpha DRK.
- CBOE Japan – In November 2023, CBOE Japan completed the transition to CBOE technology, completing a two-year integration project.
As new financial instruments emerge and fresh forms of trading technology are developed, the pressure on data management teams to adapt their low latency data feeds and feed handlers will only continue to grow. Firms need a partner that can help their data management teams during these transition periods with testing environments, support on weekends, and access to individuals with deep expertise in low latency data feed technology.
Partnering for the road ahead
LSEG Low Latency Solutions deliver robust support for firms around the world that need to adopt a new or evolved low latency data feed or feed handler.
- Deep expertise – Recent additions to the low latency team over the past year have added even more knowledge and experience for data management teams to rely on.
- Testing environments – Low latency testing environments are available for data management teams to use to make sure that the changes required were successfully made.
- Support on weekends – Soon support on weekends will be available for low latency clients who are involved in a change process, providing help when it’s most needed.
LSEG Low Latency Solutions are supporting data management teams who are engaging with securities market change in other ways, too. For example, Real-Time – Ultra Direct recently added feeds to the Osaka Digital Exchange (ODX) and the FMX Futures Exchange (part of the BGC Group). While the original go-live date for the FMX Futures Exchange had been set for the end of 2024, LSEG Low Latency Solutions (with its MayStreet technology assets and expertise) wrote a feed handler to the exchange and delivered it to clients for testing with a go-live in September 2024.
Given the accelerating pace of change at securities exchanges, the growing importance of operational resilience, and front office demands around hitting implementation deadlines, it makes sense for data management teams to partner with a low latency solution provider that truly supports the change process.
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