Chi-X Targets FAST Feed by Year-End

The trading venue currently distributes its data via a protocol known as Chi-X MD, which is a version of the Itch 2.0 data protocol used by Nasdaq, according to Chi-X director Hirander Misra, who adds that the year-end target is "an estimated guideline" rather than a concrete date.

By developing a FAST feed, Chi-X can offer a choice of data delivery protocols to clients, who will be able to monitor which protocol offers the lowest latency and decide which feed to use based on their speed requirements. "Obviously, we'll offer a Chi-X MD version for those that want it [as well as] a FAST version…. It'll be quite interesting to benchmark the two," Misra says.

User firms' choice of delivery protocol may be driven by different priorities according to their business type. "For a lot of hedge funds, every millisecond counts. If we benchmark [the feeds], and Chi-X MD is proven to be the faster standard, they'll always go with what's fastest," Misra says, adding that firms also have experience of working with the Itch-based protocol, whereas others might be looking for a standardized way to access data from multiple venues, and as such may be attracted to FAST.

Instinet made its initial choice of market data protocols towards the end of 2005. At the time, it was looking for a proven standard that could reliably handle high volumes of data. As well as meeting that requirement, Itch already had a large installed base of users. "A lot of the large investment banks had experience coding to it, so they already had feed handlers [from which] they could re-use the code," Misra says.

In contrast, FAST was still in the early stages of acceptance and the broker did not consider it sufficiently mature for adoption at the time, Misra says. But since then, more work has gone into developing the protocol, and user acceptance has progressed significantly, with a number of exchanges committed to rolling out—or at least piloting—FAST feeds, including the Chicago Mercantile Exchange, the London Stock Exchange, OMX and NYSE-Euronext's Arca division.

As a result, "FAST now has a good chance of becoming a de facto market data standard around Europe," Misra says.

Chi-X intends to support both Chi-X MD and FAST—at least until one emerges as either the most efficient or most popular. "It's important to lower those barriers to entry and offer choice…. It makes sense to offer both in tandem and see which one wins out," he says.