NYSE Technologies: Low Latency Problem Solvers
When a large bank or broker-dealer looks to offer high-frequency trading to its clients but finds that its trading infrastructure, which is stitched together from multiple M&A deals, is inadequate, what should it do? It could be time to call in a consultant to diagnose the problem.
This past October, NYSE Technologies, a unit of NYSE Euronext, partnered with technology advisory firm CSTK InVenture to offer advisory and technical help to banks and broker-dealers in the low-latency trading and infrastructure space. While NYSE Technologies already supplies a variety of trading technologies, connectivity and market data services to broker-dealers, through the strategic alliance with CSTK it is looking to provide more of a top-down analysis and diagnostic service for banks' infrastructure needs, according to NYSE Technologies CEO Stanley Young, who acknowledges that the service could in the end help the company sell more technology.
"Our job is to take the friction out of trading," says Young. "If we can provide an infrastructure that enables transactions to flow freely, irrespective of where they execute, and supported by market data, then this all leads to that virtuous circle of global trading."
According to Adam Honore, research director at Aite Group, NYSE Technologies already has established itself as a neutral provider of technology for trading and infrastructure. "They've got the colocation services and they've got the NYFIX FIX network for order routing, and they offer data feed handlers from the Wombat acquisition as well as the Risk Management Gateway, or RMG," he says. "CSTK brings the project management piece of this, and that's why these two companies worked together to build the data centers."
NYSE Technologies first developed a relationship with CSTK InVenture -- a joint venture between KLG Advisors and CS Technology -- when the firm advised NYSE Technologies on real estate dealings related to its building of two new data centers, in Mahwah, N.J., and in Braselton, outside of London. While NYSE Technologies would be called in to discuss a specific technology, Honore explains, "CSTK has the process-oriented perspective of how everything works together and gives the big picture."
Solving Complex Pain Points
Though NYSE Technologies' Young says the firm's new service will not exclude any size firm, he emphasizes that CSTK InVenture will help NYSE Technologies solve the problems of complex banks. "Larger players understand the value proposition, but their ability to execute on it or take advantage of data fabrics to build a low-latency trading infrastructure in a number of hubs around the world is quite difficult because the banks came together through legacy infrastructures," he comments. "If their bank merged with another bank -- leaving it with product silos and a diverse real estate portfolio -- there could be some low-latency infrastructure in one data center mixed in with non-latency-sensitive infrastructure."
Adds JP Rosato, CEO of CS Technology, "We're able to document and point out to customers where the starting point should be. The focus gets to the larger pain points, which can be addressed."
Although NYSE Technologies doesn't want to become a professional services consulting company, according to Young, he says large banks with complex IT environments need that level of advice to take advantage of the products and services that NYSE Technologies already offers. NYSE Technologies provides its financial firm clients with technology and services (including market data, order routing, connectivity, risk management and messaging middleware) on a managed-service basis. As a result of working with CSTK to build the new NYSE Euronext data centers, Young continues, he realized that the advisory firm had the skills and expertise to assist NYSE Technologies' financial clients.
Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio
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