JPX flags trading capacity issues

The Japan Exchange Group has delineated how it handles capacity issues stemming from a fourfold increase in trades going through its Arrowhead trading system since 2010.

The Arrowhead trading system of Japan Exchange Group (JPX) handled less than ten million orders a day when it was launched in January 2010, but by May 2013, the system was handling 46 million orders per day.

The exchange noted in its 2014 report, which has just been published, that as a result of higher system processing speeds and the launch of co-location services, the structure of the market is changing dramatically, with investors increasingly adopting high-speed, high-frequency techniques.

JPX said it is monitoring market trends and system use, and is working to manage the system capacity of the group. It added that when system usage approaches a certain threshold, action is taken to make improvements immediately.

That is the job of JPX’s Capacity Management Committee, which is chaired by their chief information officer. Its duties include analysis of the status of systems operations, early-stage policies for improvements, and providing feedback for the development of next-generation systems.