Spain’s Bolsas y Mercados Españoles (BME) will introduce co-location services on its market from next month as part of efforts to increase high-frequency trading at the national exchange.
From 12 November, BME members will have the ability to place their servers a few meters away from the bourse’s cash equities and derivatives trading platforms. BME market data will also be accessible from the same facility.
Five of the Spanish exchange’s members have already signed up to the service.
Co-location lets brokers reduce the time it takes to send orders from their systems to the market.
The service is favoured by high-frequency trading firms that need low-latency infrastructure for their strategies to work effectively.
“The goal of this service is to improve the speed of access to the Spanish market, in this way enhancing liquidity and improving price formation,” read a statement from the BME.
BME’s co-location service will be managed by specialised staff who will be responsible for ensuring access to the market is "fair and secure".
The version of MiFID II agreed upon by the European Parliament’s Economic and Monetary Affairs Committee last month includes an obligation for trading venues to provide co-location on “a non-discriminatory, fair and transparent basis”.