NYSE Technologies has strengthened its push into connectivity services in Asia with the launch of a new ”liquidity centre' in Tokyo for the Japanese market. Laurence Thiery, managing director, APAC strategy and solutions at NYSE Euronext in Singapore, describes such centres as a set of managed trading solutions that are provided to clients to reduce costs and offer low-latency access to trading venues, “so they can concentrate on what they do best without having to worry about the plumbing”.
Unlike NYSE Technologies facilities in the US and UK, the new liquidity centre in Tokyo is running on data centres owned by third-party providers, though it will offer the same solutions as the centres in Basildon, near London and Mahwah, New Jersey.
For some of the Japanese exchanges, says Thiery, connectivity for market data feeds sits on a different physical connection to that for trading. “This means that the complexity and number of lines you need to trade Tokyo is increasing, and with it the cost,” she comments. “As electronic trading technology evolves, market participants find they have to keep up with technology upgrades and new requirements; for example, adding bandwidth or keeping up with new exchange interfaces.”
With increases both in fragmentation and in the market share of proprietary trading systems (PTSs) in Japan, the amount of market data, and therefore bandwidth requirements, will continue to rise.
NYSE Technologies conducted a global client survey to gauge client interest in trading solutions to access global markets. “In Asia, Tokyo is still on the top of many people's list as a market they want to enter, but the cost of increasing bandwidth and high start-up capital are barriers to entry they all have to take into careful consideration,” says Thiery.
“As a result, trading participants are demanding more all-encompassing market connectivity services so that they can focus on running their business and serving their customers more efficiently.”
Thiery argues, however, that increasing bandwidth should not be seen as a negative thing. “It obviously has an impact on trading participants in terms of work and costs, but for the market, it means more volume and more liquidity,” she says.
In a separate development, NYSE Technologies has entered into a definitive agreement to acquire Metabit, a leading Tokyo provider of high performance market access products throughout Japan and Asia.