Canadian exchange group TMX is to introduce a new equities trading platform in Q1 next year, TMX Quantum XA, which it claims will reduce trading latency twenty-fold.
Due to be installed first on TMX Select, the group’s specialised platform for high-frequency trading, TMX Quantum XA is designed to provide equity trading participants with higher speed and capacity as well as more efficient order processing. Implementation on Toronto Stock Exchange and TSX Venture Exchange will follow at the end of 2013.
Median latency on the new platform is expected to be below 100 microseconds for order executions. The new trading system will be capable of handling 200,000 orders per second. To augment the technology enhancements, 10 gigabit communication access will be made available for the first time to Toronto Stock Exchange, TSX Venture Exchange and TMX Select users.
TMX has already developed a functioning prototype that includes all the feautures of the current Toronto Stock Exchange, TSX Venture Exchange and TMX Select marketplaces.
“We are very excited about the results of our prototype and about the significant benefits that TMX Quantum XA will provide,” said Brenda Hoffman, chief information officer, group head of technology, TMX Group. TMX has stated that it expects to incur C$4 million in annual operating expenses to support the technology initiative.
TMX Group is currently the subject of a takeover proposal by a group of 13 Canadian financial institutions operating under the name Maple Group. The intention of the Maple Group is to create a unified trading and clearing platform together with Canadian clearer CDS and alternative trading system Alpha Group. However, regulators are still currently considering Maple’s acquisition of TMX, with a decision expected before the end of Q2 2012.