Nope, the date is not April 1, though I had to double check. TraFXpure, a planned spot market for foreign exchange, has begun testing for an early 2013 go live, exercising a matching engine that features random latency execution.
To be exact, the matching engine’s latency is not random, but orders submitted to it will be subject to a “non-deterministic pause” before being matched. The business theory being that such a mechanism levels the playing field for all participants, regardless of their financial clout, investment in low-latency technology or their proximity to the marketplace.
Operated by inter-dealer broker Tradition, TraFXpure has support from major FX players Barclays, BNP Paribas, Deutsche Bank, Morgan Stanley, Royal Bank of Canada, SEB, Standard Chartered Bank, State Street Global Markets and UBS.
Market data will be made available – at cost – to all market participants, representing another departure from the norm for execution venues. One cannot imagine the venue is going to provide co-lo facilities either, or be much of a draw for latency management vendors or those with FPGA technologies!
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