The Intercontinental Exchange (ICE) has signed an agreement with the UK’s National Physical Laboratory (NPL) for precise time synchronisation ahead of MiFID II.
NPL will provide the exchange operator with a certified time signal traceable to coordinated universal time for trade timestamping, latency monitoring and synchronisation.
MiFID II - due to come into force on 3 January 2018 - requires financial institutions to achieve up to 100-microsecond level traceability of all trading events.
Dr Leon Lobo, strategic business development manager at NPL, explained timing is everything in today’s markets.
“High-frequency trading represents around 30% of UK trades and 50% in the US – precise timing offers competitive advantage. Current systems rely on GPS which is vulnerable to jamming and other interferences and uses equipment that can be inaccurate,” he said.
NPL describes itself as the ‘home of atomic time’ and it operates one of the world’s most accurate atomic clocks, which is accurate to one second every 158 million years.
In August last year, UBS deployed NPL’s time accuracy technology for regulatory time synchronisation reporting requirements under MiFID II.
Global co-head of equity electronic agency trading at UBS, Chris McConville, said at the time it would “provide UBS infrastructure with a stable, accurate and resilient time signal, whilst simplifying the MiFID II time synchronisation traceability requirements.”
Lobo concluded MiFID II continues to put pressure on firms to comply with the new standards for timing to prevent market disruption.