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The London Stock Exchange today announced the launch of Exchange Hosting – a service providing high frequency algorithmic trading firms with the fastest access to TradElect and Infolect, the Exchange’s trading and information systems. The service allows firms to physically locate their servers within the Exchange’s own data centre, providing sub-millisecond access to the TradElect matching engine and Infolect market data, thereby eliminating network latency.
Commenting on the service, David Lester, Chief Information Officer at the London Stock Exchange, said:
“Exchange Hosting extends the variety of connectivity options available to customers by providing the ultimate solution in terms of low-latency access to our markets. This new service underlines our commitment to reducing latency at each stage of the trading cycle and facilitating the structural shifts in trading patterns that are driving growth on our markets. The service will allow customers to host their algorithmic engines next to our core TradElect execution engine and aid further liquidity generation and market efficiency.”
For member firms that are connected to the London Stock Exchange via 100 megabit lines, Exchange Hosting could reduce roundtrip trade execution and market data transmission times by another one and a half milliseconds. Further performance benefits are possible for clients using lower bandwidth connections or who are located outside central London.
The Exchange Hosting service will be introduced in two phases. In response to customer demand, phase one will start with an initial release of cabinets in September 2008. This will be followed by a further release of cabinets and an enhanced service in February 2009 when a number of supporting value added services will also be launched.
Phase one of Exchange Hosting will be launched in conjunction with recently announced further upgrades to TradElect capacity and latency. In September, current capacity on TradElect will initially double to 10,000 continuous messages per second. In October, it will double again to around 20,000 continuous messages a second and end-to-end execution latency on TradElect will be reduced by 50 per cent from six milliseconds to three milliseconds.
