Asia-Pacific Financial Information Conference Panel: Asia Co-Location Centers Must Open Up
Panelists at last week’s conference called for ways to make co-location more accessible to make cross-market trading more practical in the region.
Exchanges are too restrictive over who can access the centers, and do not provide sufficient latency transparency to allow firms to tune their trading algorithms, said Del Abdullah, head of electronic trading technology at Daiwa Securities.
Demand for connections between venues in Japan is growing, “but if you are in the Tokyo Stock Exchange’s co-lo center, you can’t connect to other venues, even if they are in the same building—and that hinders business, because you can’t perform best execution or take advantage of different tick sizes on different exchanges,” said Miguel Ortega, market data engineer at Deutsche Securities Japan, who added that regulation may be required to force datacenter operators to open themselves to competing venues in the interests of best execution and good business.
“Exchanges being in a public datacenter where they could cross-connect would make more economic sense,” said Chris Lee, global head of direct access and electronic brokerage at ABN Amro Clearing, who moderated the panel. “But I don’t think regulation will drive exchanges into co-locations—though maybe exchange mergers would, or maybe if an exchange finds itself with empty racks in a big co-lo center that it invested a lot of money in.”
However, Jonathan Leung, vice president of market development and head of hosting services at Hong Kong Exchanges and Clearing, said HKEx’s policy for its own co-lo center will be more relaxed than other restrictive exchange agreements, and that in future, exchange datacenters will be required to provide more value to clients.
“From a technical standpoint, the point at which the speed of light becomes the limitation will probably be what creates a more level playing field,” Ortega said. “So then it comes down to who has better strategies and who makes best use of market conditions, rather than it just being a latency arms race.”
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Devil’s Bargain: Closed architecture systems will derail AI ambitions
Rob Flatley explains why closed-off systems will fall flat when it comes to AI adoption.
This Week: First Trust/Bloomberg/New Constructs, Cboe/Metaurus, LTX/MultiLynq, and more
A summary of the latest financial technology news.
Waters Wavelength Podcast: S&P’s CTO on AI, data, and the future of datacenters
Frank Tarsillo, CTO at S&P Global Market Intelligence, joins the podcast to discuss the firm’s approach to AI, the importance of data, and what might be in store for datacenters in the coming years.
BMO’s cloud migration strategy eases AI adoption
The Canadian bank is embracing a more digital future as its cloud strategy makes gains and it looks to both traditional machine learning and generative AI for further augmentation.
Waters Wrap: GenAI and rising tides
As banks, asset managers, and vendors ratchet up generative AI experiments and rollouts, Anthony explains why collaboration between business and tech teams is crucial.
Ice moves to meet demand for greater cloud, AI capabilities
The exchange also outlined competitive advantages behind managing its data and cloud strategy internally during its Q1 earnings call on Thursday.
FactSet looks to build on portfolio commentary with AI
Its new solution will allow users to write attribution summaries more quickly and adds to its goal of further accelerating discoverability, automation, and innovation.
Most read
- Waters Wavelength Podcast: S&P’s CTO on AI, data, and the future of datacenters
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- BMO’s cloud migration strategy eases AI adoption