Smart order routing

Chi-X launches exchange services business

Chi-X Global has bought data management firm Cicada, which it will use to create Chi-X Global Technology, a unit supplying technology-based services to exchanges and alternative execution venues. Gregory Smith, Cicada’s founder and CEO, will head up the new unit, which will be run separately from the Chi-X trading platforms.

Chi-X Global is the holding company established by agency broker Instinet to house the Chi-X trading platforms. The company is 100%-owned by Instinet.

The new unit’s offering will combine Cicada’s market data software with Chi-X Global’s matching and smart order routing technologies.

“We are looking to expand the Chi-X platform globally,” Tony Mackay, CEO of Chi-X Global, told “A number of exchanges have asked us whether we could sell them technology. A few people are contemplating our services at present.”

Cicada provides data management, customer qualification and compliance software to institutions, exchanges and data vendors. Its products include MarketPrizm, a data management and trade data aggregation tool for algorithmic trading.

Chi-X Global was attracted to Cicada mainly because of its experience in providing technology to exchanges, according to Mackay. “They have developed a market data distribution system for Deustche Börse and Euronext, and have partnered with Nasdaq OMX in a number of exchange deployments,” said Mackay. To date, Chi-X has only developed technology for its own trading platforms.

Mackay said Chi-X may use Cicada’s market data experience to provide ultra-low-latency feeds and historical data for back-testing algorithms and smart order routers. “This will be an important source of additional revenue for Chi-X as we develop the business globally,” he said.

Although the new business unit could find itself supplying technology to an exchange that competes against a Chi-X trading platform, Mackay believes the improved technology helps the whole market. “With the London Stock Exchange, as they have improved their technology, that has helped the whole market grow, which has in turn helped Chi-X grow,” said Mackay.

He added, “There are opportunities in all four corners of the world at present.”