Euronext, the pan-European exchange and market infrastructure group, has launched the Euronext Wireless Network (EWIN), making it the first exchange in Europe to offer ‘plug & Play’ order entry via microwave technology, and significantly enhancing the speed of order transmissions between London, UK, and Bergamo, Italy.
The launch of EWIN represents a significant technological advancement for the exchange group. Developed in collaboration with McKay Brothers, the independent microwave network provider, and leveraging the faster transmission speeds of microwave technology, EWIN offers a direct and highly efficient communication pathway, reducing the time required to send orders from London Equinix LD4 to Euronext’s Optiq matching engine in Bergamo IT3 to under four milliseconds, around half the latency of existing fibre links. EWIN is also designed to ensure seamless and efficient order handling, offering 100% resilience, thanks to its full fibre back-up.
Major financial firms Goldman Sachs and Morgan Stanley have already adopted the new technology.
“After establishing our new IT3 data centre in Bergamo, near Milan, we realised from a few large tier-one brokers that they were interested in exploring the performance benefits of microwave technologies,” explains Nicolas Rivard, Global Head of Cash Equity and Data Services at Euronext, in conversation with TradingTech Insight. “Although microwave networks have been around for some time and are relatively established for certain participants, it is a costly and complex technology with a high barrier to entry. Typically, you cannot buy a small amount of bandwidth, which makes the solution expensive. Additionally, there is a technical aspect because you need to develop IT capabilities to route your orders through the microwave. By default, if you buy bandwidth from a microwave provider, it’s not plug-and-play; you need to develop your protocol into the technology.”
Euronext has worked closely with McKay Brothers to address these challenges, says Rivard. “To lower the barrier to entry in terms of cost, we have purchased a bulk of bandwidth and are offering it to clients in slices, starting from 1 Mbps upwards. This means that clients can try it for six months at 1 Mbps for example, and then scale up as needed, rather than committing to a costly solution from the outset. And to address the technical complexities, the solution we’ve developed together with McKay Brothers allows clients to use the microwave link as if it were any other standard connectivity, making it very plug-and-play.”
The microwave route, provided by McKay Brothers, has been operational for two years, since Euronext went live on IT3 in Bergamo in June 2022. But this is the first time McKay’s technology has been used to underpin an exchange’s own solution.
“The development and design of this service has been quite new compared to our usual offerings,” says Stéphane Tyc, Co-Founder of McKay Brothers. “Typically, when a client purchases microwave bandwidth, they need to undertake significant internal development to integrate with the network. However, Euronext’s end clients don’t need to perform any additional integration work; they simply need to set up logical access to Euronext’s matching engine, a process they are already familiar with. And then they can benefit from a fast network that competes with the microwave products used by market makers. The important thing here is that firms who want to use this link can now just go direct to the exchange to access it, without having to put in place dedicated technology.”
Given that microwave networks are susceptible to weather and other atmospheric conditions, how does Euronext ensure resiliency? “We have two routes, one microwave and one fibre, and they work seamlessly together,” says Rivard. “We have ensured, with McKay and our internal IT team, that every order gets sent twice, once via microwave and once via fibre. The first order that reaches the IT3 datacentre is processed, and the other is blocked by the system. This guarantees 100% redundancy, increasing the overall availability of the service.”
The link is now operational, with Morgan Stanley and Goldman Sachs having gone live on day one, 10th July. “The technology has delivered on its promise so far, with latency below four milliseconds and very stable performance,” says Rivard. “Clients are currently only sending specific order types via EWIN to improve certain latency sensitive execution strategies, such as IOC (immediate or cancel) and other aggressive orders. The number of packets going through the microwave is what we expected. And of course, this is just the beginning.”
Both Euronext and McKay Brothers talk of this new service as a way of further democratising the market, bridging the gap between prop trading firms/market makers and banks/brokers. So will it be rolled out to other European centres?
“First, we need to make sure it works from London, to prove that it has an impact and is beneficial for our clients. That will take a few months to confirm,” says Rivard. “But we already have clients interested in having the same service from other locations and asset classes in Europe.”
Subscribe to our newsletter
