Derivatives Exchange Startup GMEX Readies Feeds

Global Markets Exchange Group, the derivatives exchange operator and consultancy established by former Chi-X Europe co-founder and chief operating officer Hirander Misra and industry veteran VJ Angelo, is finalizing details of the market data feeds it plans to launch in the fourth quarter of this year to accompany its new futures, fixed income and currency trading platforms.

The markets, which are currently awaiting approval from the UK Financial Conduct Authority to operate as multilateral trading facilities, include the London Derivatives Exchange (LDX), which will trade derivative products from developed markets; the Global Securities Exchange (GSX), which will trade developing markets equities and debt products; the Global Derivatives Exchange (GDX), which will trade emerging markets derivatives products; and the Global Commodities Exchange (GCX), which will trade cash-settled commodity products from developing markets.

The datafeeds from each market will be available in an optimized binary protocol developed by London-based Forum Trading Solutions -- the special purpose vehicle set up by Misra in 2012 to acquire the technology division of exchange group Plus Markets -- that is similar to the widely-used ITCH data protocol, and in FIX 4.4 and FIX 5 protocols for non-latency sensitive customers.

For customers hosted in one of the two unnamed London co-location datacenters where GMEX plans to have a point of presence, Misra says messages delivered in the ForumMatch protocol will offer end-to-end latency of less than 15 microseconds under a load of 300,000 messages per second, while the FIX 4.4 and FIX 5 protocol will deliver latency of 85 microseconds.

Misra established the exchange group in response to changes to the European derivatives markets being introduced under the European Market Infrastructure Regulation (EMIR) and the European Commission's review of the Markets in Financial Instruments Directive (MiFID 2), which will push over-the-counter derivatives products onto exchange-like platforms such as Nasdaq OMX's new London-based NLX derivatives market.

However, unlike NLX, which trades futures on interest-rate products that also trade on competing derivatives exchanges, GMEX will list "brand new contracts that are our own intellectual property, for which we've submitted patent protection," Misra says.

Once GMEX gains regulatory approval, it plans to roll out a set of fixed income contracts, before embarking on incremental launch of currency products during first half of next year.

The corresponding datafeeds will be attractive to buy-side firms such as asset managers and hedge funds looking for suitable alternatives to products they currently trade over the counter, Misra says. "The products we've made are very liquid, and that liquidity will be attractive to the buy-side as well as tier-one, -two, and -three banks and futures players as they closely align to what is offered in the underlying OTC markets."

In addition to launching as a new exchange operator, GMEX will also run a new index business that will provide indexes for all products traded on GMEX markets, leveraging the binary messaging format and technology from Forum Trading Solutions to calculate and deliver the indexes.

Misra and Angelo have also established a consulting service based on the provision of trading platforms and associated market data engines to exchanges worldwide.