The Johannesburg Stock Exchange has created a co-location centre offering low-latency connectivity to the South African exchange.
Co-located clients will have a roundtrip latency of 150 microseconds compared to 2550 microseconds for clients currently based at the exchange’s Sandton data centre.
JSE said it saw significant demand for co-location from both local and international members. It said demand from UK customers was particularly high.
“Clients demand faster execution speeds and exchanges need to offer these in order to compete,” added Leanne Parsons, director of equity markets at JSE.
“Aside from faster trading speeds and updates to market data which will allow for enhanced response to market movements and deployment of new trading strategies, co-location also reduces the cost of bandwidth for clients.”
JSE sees co-location as a potential revenue stream and will initially provide 35 hosting units for client computers, all of which will cost the same amount to use. The facility also provides power, cooling and physical security.
Parsons said JSE has learned lessons from other markets and designed its hosting policy on a non-exclusive basis while ensuring the same public data feed is available to all members, whether co-located or not. Its solution is designed to reap the benefits of faster trading, such as tighter spreads and increased liquidity, while also managing risk and maintaining the integrity and stability of the market.
As part of the change, the equity market’s MilleniumIT trading technology has been upgraded for all members.