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Exchange Platform Review Version: 0.2 Date: 10 Nov 2008 Status: Draft for Discussion
Exchange Platform Review - Summary The following is a review of the services, performance and technology of the BATS, Chi-X and Currenex platforms. The purpose of review is better understand the platforms and possibly generate ideas for the technology renewal in IEB. Platform Summary • BATS • US Cash Equities / EU Cash Equities • ECN launched in 2006, recently launched in EU • The focus of BATS is low latency at a fraction of fees of the US Regional Exchanges • Chi-X • Chi-X is MTF in EU, it is owned by Instinet. Chi-X Canada has recently launched. • Chi-X trades EU Cash Equities • Instinet has other global ECNs, it is not known if these run on the same or different platforms • INET • The INET ECN was bought by Nasdaq OMX in 2005 • Nasdaq OMX has an ECN for US Securities • Nasdaq OMX Europe is for EU Cash Equities • Currenex • FX Spot, Forwards, Swaps, Money Markets Deposits • Currenex is a multi-bank portal supporting Executable Streaming Prices and RFQ to retail clients Limitations of the Review • The review is based on internet-based research, rather than direct contact with the Exchanges. The accuracy of materials is not guaranteed. • The platforms a loose in their definitions, particularly in the area of latencies • Little technical information is in the public domain on these platforms • The US Patent website was searched for patents for each platform, but this should not be regarded as conclusive
Exchange Platform Review - Background *1 Ownership group of Citi, Credit Suisse, GETCO, Lehman Brothers, Lime Brokerage, Morgan Stanley, Merrill Lynch and Wedbush.
Appendix B: Exchange Comparison –References Bats http://www.batstrading.com/news_article_pdf/IMD%202007-07-16%20BATS%20slashes%20bandwidth.pdf http://www.batstrading.com/news_article_pdf/Forbes%202007-05-21%20Maverick.pdf http://www.batstrading.com/bats_performance_study.pdf http://www.batstrading.com/features/bats_trading_Latency.pdf http://www.marketwatch.com/news/story/instinet-europe-set-begin-trading/story.aspx?guid=%7BC0DD56FC-2EB5-4EBB-8DDE-A6A96C0C96D2%7D&dist=hppr http://www.batstrading.com/bats_performance_study.pdf http://www.wallstreetandtech.com/resourcecenters/low-latency/showArticle.jhtml?articleID=199702208 http://www.batstrading.com/news_article_pdf/NEWSWEEK08-09.pdf http://www.batstrading.com/subscriber_resources/BATS_Connectivity_Manual.pdf http://www.automatedtrader.net/algo-trading-news-1496.xhtm Chi-X http://www.sii.org.uk/SII/WEB5/sii_files/Events/CPDseminars/CPD185.ppt?bcsi_scan_89234B1A2594B463=0&bcsi_scan_filename=CPD185.ppt http://www.instinet.com/about/releases/Chi-X_Canada_Launch_Date_.pdf http://www.chi-x.com/Faster_Performance_capacity.htm http://www.nomuraholdings.com/news/nr/europe/20080926/20080926.pdf http://www.nomuraholdings.com/news/nr/europe/20081006/20081006.pdf http://findarticles.com/p/articles/mi_m0EIN/is_2008_April_7/ai_n25126758/pg_1?tag=artBody;col1 http://www.chi-x.com/news/Chi-X%20selects%20Equinix.pdf http://www.computeractive.co.uk/computing/analysis/2226241/glitch-adds-pressure-lse-4225245 http://www.reuters.com/article/pressRelease/idUS125628+17-Sep-2008+BW20080917 INET http://www.nasdaqomx.com/whatwedo/trading/europeanmarket/ http://faculty.babson.edu/rdavies/MiFID_July2008_Davies15.pdfhttp://www.nasdaqomx.com/whatwedo/trading/europeanmarket/ http://www.advancedtrading.com/exchanges/showArticle.jhtml?articleID=206904732http://www.advancedtrading.com/exchanges/showArticle.jhtml?articleID=206904732 http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20081022005096&newsLang=en http://www.marketwatch.com/news/story/chi-x-says-market-share-ftse/story.aspx?guid=%7BBDB682CD-5510-4580-89AE-DEDE2E94CC67%7D&dist=TQP_Mod_mktwN http://whitepapers.zdnet.co.uk/0,1000000651,260130178p,00.htm http://linux.slashdot.org/article.pl?sid=07/12/14/2312210 Currenex http://www.financetech.com/feed/showArticle.jhtml?articleID=188500215 http://fxtrades.currenex.com/pdfs/news-oct-2005_latency_issue.pdf http://www.euromoney.com/Article/1924995/Article.html http://www.dealingwithtechnology.com/public/showPage.html?validate=0&page=dwt_login&url=%2Fpublic%2FshowPage.html%3Fpage%3D442123 http://en.wikipedia.org/wiki/Currenex http://www.currenex.com/pdfs/PR_CX_OneOrder.pdf http://www.eweek.com/c/a/Linux-and-Open-Source/Currency-Firm-Trades-on-Open-Source/ http://www.e-forex.net/Files/surveyreportsPDFs/Celent%20FX%20report.pdf http://www.linkedin.com/pub/0/8b9/b28
APPENDIX C: Exchange Comparison –Patents • Currenex Patents: United States 0162655; United States 0162657; United States 0162656; United Kingdom GB2379063; United Kingdom GB2392525; United Kingdom 390726; United States US6807635B1. • Instinet http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.htm&r=0&f=S&l=50&d=PTXT&RS=Chi-x&Refine=Refine+Search&Refine=Refine+Search&Query=instinet