Sifma Buzz: Migrating to the Cloud

The migration of low-latency market data feeds and exchange connectivity services to private cloud environments was a major theme at this week SIFMA Financial Services Technology Leaders Forum.

I met with several vendors that were announcing cloud-based market data and trading infrastructure initiatives at the SIFMA event. The migration of low-latency market data to the cloud means that buy-side firms will now find it easier and more affordable to access direct exchange feeds.

“We see this high-performance infrastructure being migrated to a different segment,” said Mark Casey, president and CEO of CFN Services. CFN announced the Alpha Platform, a high performance private cloud for automated trading. It enables content and market data applications and hosted ticker plants applications and could be used for risk management and OMS/EMS platforms as well.

While the buy-side has been left out of the data center collocation game – there were indications at the show that several technology vendors are developing solutions that are aimed at giving the buy-side access to high performance, low-latency executions and market data. CFN’s Casey says that Alpha Platform is proximity hosted in data centers with all the exchanges and covers equities, options, futures, and FX.

CFN claims that quantitative hedge funds and other sophisticated players are moving toward high frequency trading. These firms are looking to accelerate their trading strategies, says Casey. This would be cost prohibitive for a firm to build on themselves. It would take 12 to 18 months for an HFT firm to build this out, said Casey.

As an example, SIXTelekurs USA is partnering with CFN to deploy low-latency, direct-exchange access market data on the Alpha Platform. AT SIFMA, Barry Raskin, managing director of SIXTelekurs USA, said the company didn’t see the driving force behind the low latency and high frequency trading market. SIX Telekurs was more focused on the pure valuations, tick and reference data, selling into mutual funds and other buy side firms. But now the American subsidiary of the Swiss-based information supplier is partnering with CFN to enter the space. Telekurs brings access to 270 exchanges as well as over 500 contributed sources plus all the connectivity and relationships with financial customers. It can supply direct exchange feeds in raw format – required by HFT firms – or it can normalize them in MDFStream, a consolidated feed.