GMEX Readies Data Test Days Ahead of Exchange Launch

GMEX plans to hold two live simulation days this quarter, during which vendors and trading firms will be able to test their systems in a live trading environment against market data that is "as close to production as you can get," says chief executive Hirander Misra.

Data vendors first began testing GMEX's market data feeds in August last year. GMEX offers two feed formats: an optimized binary protocol similar to the widely used ITCH data protocol, and one based on versions 4.4 and 5 of the FIX Protocol. Initially, GMEX officials expected that most participants would prefer the FIX version, though this has proved not to be the case.

"Binary is less easy to write to than FIX, so when the vendors came in, we thought they'd be using the FIX market data interfaces, but actually the major data vendors... seem to be gravitating towards the binary interfaces at the outset, even though some of their flow is terminal-based," Misra says. "The reason it has played out this way is that many run their own ticker plants or market data distribution over their own networks, and they want it to be as optimized as possible. Binary is four times faster than FIX, so they want to start with that so they can distribute real-time data faster," he adds.

In addition to the two live simulation days, GMEX will offer full end-to-end testing for trading participants, such as Virtu Financial, which this week announced that it will become a liquidity provider for CMF contracts. Indeed, following the start of live trading, Misra says he expects to sign up a further nine liquidity providers, as well as a handful each of brokers, buy-side firms, futures trading firms and general clearing members to create a balanced market.

To receive GMEX's multicast market data feeds, each of these participants must cross-connect to its market data interfaces at Equinix's LD4 datacenter in Slough, where GMEX hosts its primary matching engine.

"There are a multitude of venues at LD4, so all the key algorithmic traders and latency-sensitive liquidity providers are already located in the datacenter," Misra says.

GMEX's exchange is scheduled to launch in the early April, subject to regulatory approval for the trading and clearing of the CMF contracts at Eurex. GMEX received approval from UK regulator the Financial Conduct Authority in December.