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A-Team Insight Blogs

NYSE Loosens Liquidity Centre Access

While there are no official statements being issued, inside word suggests that NYSE Euronext is loosening the restrictions previously in place on network access to its liquidity centres. Essentially, the exchange is now allowing remote access to its matching engines via networks other than its own SFTI.

Since flipping the on switch at its liquidity centres – aka data centres – in Mahwah, NJ and Basildon, UK in 2010, the NYSE has required trading firms to use the exchange’s own SFTI network – for Secure Financial Transaction Infrastructure – to gain remote access to them.  SFTI itself is accessed via a number of Points of Presence (PoPs) located at various telecom hubs and proximity centres in the New York City/NJ and London metro areas, and beyond. In London, NYSE also restricts connectivity into its PoPs to just three providers: Colt, euNetworks and Verizon.

Recently, though, it looks like that somewhat controversial policy has been relaxed, and that other network providers can now run their fibre connections directly into the data centres. This policy change follows on from a similar one at the end of last year regarding co-location eligibility, opening up the centres beyond member firms to the community of data and transaction network providers.

In London, some trading firms might look to take advantage of – or drive deployment of – new network routes, moving away from connecting via the current closest SFTI PoP, at Interxion’s east London proximity centre. Those firms will likely be those with fairly specific, latency-sensitive, trading strategies.  For others, Interxion’s combination of SFTI, connectivity to markets like Bats Europe and other community hub advantages will work well enough.

While exchange insiders say the policy change is just a case of responding to customer requirements, others point out that a more open access regime will likely find favor with European regulators, which are currently vetting the proposed NYSE/Deutsche Borse merger. That transaction could well see markets such as Eurex move from Frankfurt to Basildon.

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