About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

AWS, SGX and Aquis POC Demonstrates Feasibility of Cloud-Based Matching

Subscribe to our newsletter

AWS, the Singapore Exchange (SGX) and Aquis Exchange recently completed a proof of concept (POC) that confirmed the viability of situating an exchange matching engine in a cloud environment.

The POC – which focused on evaluating the core functions and connectivity latencies of Aquis’s order-matching platform in the AWS cloud – demonstrated respectable order turnaround latency and jitter measures, compared with standard optimized data centre set-ups, indicating that cloud could present a feasible hosting option for both start-up and established exchanges and execution venues.

The POC made use of AWS’s Transit Gateway facility to handle the multicast requirement that is so often cited as a barrier to migrating high-performance trading functions to the cloud.

Using Transit Gateway, the POC was able to produce matching latencies on the Aquis platform of 100-200 microseconds, compared with 13 microseconds in a fully optimized environment. After some work to reduce variability, AWS and Aquis were able to reduce jitter on the POC to just 4 microseconds, making the approach viable for trading firms accustomed to tuning their trading strategies to venues’ jitter measures.

Adrian Ip, director of product management at Aquis, calls the jitter measure “an amazing result” that supports the possibility of operating exchange matching engines in the cloud. While cloud is slower than a fully optimized data centre implementation, high-performance market participants would be able to use AWS’s Direct Connect facility – or other cloud operators’ equivalents – to create a high-bandwidth uplink from FIX engines, smart order routers and other trading algorithms hosted within traditional data centres like those operated by Equinix, Interxion and CenturyLink.

By setting access parameters based on, say, number of network hops, operators of cloud-based exchanges could ensure a level playing field while eradicating the need and expense of operating colocation facilities. Ip reckons the set-up costs for establishing matching in the cloud could represent an 80%-90% savings versus traditional platform implementations within data centres. He also suggests that cloud’s higher levels of resilience could go some way to reduce the outages experienced by such high-profile markets as Australian Stock Exchange, Japan Exchange Group and Euronext.

To facilitate the POC, says Ip, the partners created multiple virtual private clouds (VPCs) that used the Transit Gateway facility to handle connections to trading entities’ FIX engines situated within those entities’ AWS instances. Through this connection, the POC was able to control access to the matching engine, ensuring security and resilience.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Leveraging interoperability: Laying the foundations for unique best-of-breed trading solutions

Interoperability on the trading desk promises more actionable insights, real-time decision making, faster workflows and reduced errors by ensuring data consistency across frequently used applications. But how can these promises be kept in an environment characterised by multiple applications and user interfaces, numerous workflows and technology vendors competing for space on the trader’s desktop? This...

BLOG

Tech Trends in Trading: Industry Experts Review 2023 and Look Ahead to 2024

As 2023 draws to a close, it’s time to look back at some of the more interesting trends that have emerged in the trading technology space over the last twelve months, and to take a look ahead at what 2024 might have in store. With this in mind, TradingTech Insight reached out to a group...

EVENT

RegTech Summit London

Now in its 8th year, the RegTech Summit in London will bring together the RegTech ecosystem to explore how the European capital markets financial industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

Hosted/Managed Services

The on-site data management model is broken. Resources have been squeezed to breaking point. The industry needs a new operating model if it is truly to do more with less. Can hosted/managed services provide the answer? Can the marketplace really create and maintain a utility-based approach to reference data management? And if so, how can...