TMX Atrium is upgrading its North American network, has completed an upgrade of its European network and has experienced a flurry of activity around third-party connectivity over the past couple of months, but there is more to come as the provider of managed low-latency connectivity meets the needs of customers seeking lowest latencies as well as those looking for a high-performance trading environment.
A quick recap: The company started life in Paris as Atrium Network in 2006 and made an almost accidental entry into the emerging low-latency connectivity market in 2008, before being acquired by TMX Group in August 2011. Emmanuel Carjat, managing director of TMX Atrium and formerly CEO of Atrium Network, explains: “We started to build the Atrium network in 2007 with nodes in London and Paris. Initially, we provided a virtual private network for brokers sending orders to market. Then we started to connect to a few data centre locations in London, including Telehouse, Interxion and Equinix, providing connectivity to markets such as Chi-X at Equinix’s LD4 data centre in Slough and NYSE Euronext at Interxion’s data centre in Brick Lane just outside the City.”
“We made the interconnections with dark fibre, which at the time was sold by the metre. We wanted to offer an efficient service so we chose the shortest distances between the locations more as a matter of price than speed. Also at this time, fibre optics technology was limited to 50 kilometres in a single hop, so covering short distances meant we did not need to buy more equipment. In 2008, when low latency became a topic in the finance industry, we realised we had inadvertently built a network that was very fast as distances were short, so we entered the low-latency market space.”
Fast forward: The company has since grown to offer both low-latency and high performance connectivity. Its network has 23 points of presence across 11 countries in Europe, North America and Canada, and it offers access to about 80 market data feeds and 30 venues. South America and Asia-Pacific are in the company’s sights, but for the moment the focus is on geographic markets where it is already in business.
To capture customers whose core business is ultra-low latency as well as those that include low latency as part of a high-performance trading business, TMX Atrium has taken a pragmatic approach to competing on lowest latency terms, dedicating its efforts to particular routes. These include London to Moscow via Stockholm, a route it can cover in less than 40 milliseconds round trip, Moscow to Frankfurt, Toronto to New York and intra-London routes. Other low-latency routes in Europe include London to Amsterdam, Paris, Brussels, Geneva and Frankfurt, and in North America New York to Chicago.
Carjat says that while some customers require lowest latency and are prepared to pay big sums of money for it, most fall into the high-performance trading category and want a mix of low-latency, managed services and high level of performance. With this in mind, TMX Atrium has started to upgrade its North American network using the latest generation of Juniper Networks switching and routing equipment, and uses wavelength division multiplexing technology on its dark fibre routes. The outcome will be a 10 gigabit per second platform offering low latency, high resilience and high performance that will improve access to liquidity centres and support growing market data volumes. The upgrade in North America is expected to complete at the end of this quarter.
The company completed a similar upgrade to its European network early this summer and also invested in mini points of presence in Paris and London that are targeted at smaller clusters of clients located in smaller liquidity hubs, but still provide fast and flexible connectivity to the network. Fulfilling the transatlantic element of its infrastructure, TMX Atrium uses Global Crossing and Hibernia Networks cable.
In addition to network development, the company has recently experienced diverse connectivity activity. For example, to meet increasing interest in foreign exchange trading, connectivity to Knight Hotspot FX at Equinix NY4 has been upgraded, while TMX Atrium’s connectivity to the London derivatives platform Nasdaq OMX NLX has encouraged market data and derivatives technology company SuperDerivatives to join the TMX Atrium community.
Others signing up include Raptor Trading, a provider of multi-asset electronic trading and risk management products, and SS&C Technologies, a provider of financial services software and software-enabled services. Reflecting its dedication to managed services for the financial services sector, the company recently supported customers through the move of The Order Machine’s matching engine from Lunda in Stockholm to Equnix LD4 in London, making sure they experienced no disruption and were ready to use the multi-lateral trading facility as soon as it went live in London. Carjat expects to support more venue migrations through the remainder of this year. Looking forward, TMX Atrium is considering connectivity to swap execution facilities as they build up over the next six to 12 months.
With an asset class agnostic platform and access to 30 venues, TMX Atrium’s client base is mixed and includes venues, buy-side firms, brokers, clearers, independent software vendors and market data vendors with requirements ranging from extreme low-latency to no low-latency and everything in between. Carjat explains: “The bulk of our customers want performance, overall performance including low latency, capacity and flexibility, as well as a supplier that can provide managed services, understands financial markets and will follow where they want to go.”
To date, the company has won about 200 customers and is just short of 500 end points, but it sees plenty of scope for growth and can expect the growing community on the network to attract others seeking connectivity to the community.
Looking forward: Atrium is considering additional technologies, such as microwave. It has decided not to build microwave capacity on the popular Frankfurt to London link for regulatory reasons, but may implement microwave elsewhere purely to improve latency and depending on customer demand. Carjat suggests performance across a microwave link reaches about 90%, while fibre offers 99.999% uptime, making microwave an option only for those that are prepared to pay a high price for ultra-low latency and suffer occasional downtime – at least for the time being as the technology matures.
As recent customer additions to the TMX Atrium network settle in and start to build business in the community, Carjat and his colleagues continue to consider further flexibility and performance improvements for the infrastructure. Carjat concludes: “Fragmentation in the low-latency market means we are working to deliver ultra-low latency as well as high-performance trading infrastructure. In the short term, we are also planning expansion into additional asset classes and connectivity to swap execution facilities.”