London Stock Exchange Group (LSEG) recently asserted that the capital’s position as a global financial centre is safe.
However there remains a clear gap between the value of shares listed in London and in New York, which encourages floating companies to look overseas.
This situation makes it more important than ever for London’s financial traders to seek agile organisations providing expert access to global markets. Such organisations also need to understand shifting trading patterns, liquidity and regulatory landscapes.
Traders need to avoid having to build and maintain the underlying components of trading infrastructure themselves. Directly leasing racks in an exchange colocation facility or buying expensive cross connects to the exchange switches for trading access, is not the core competency of trading institutions and should be left to expert partners.
The end goal is to be able to tap into the network wherever traders want to trade, – be that London, New York or Hong Kong or any other global financial centre.
Traders also need fast, reliable connectivity and market data feeds to drive their trading. Ultra low latency trading is vital for algorithmic trading and trade execution speed is critical to ensure the best market prices are capitalised upon.
The best low latency strategies depend on powerful servers housed close to exchange matching engines. TNS specialises in building shared networks and colocation footprints, offering trading firms access to market data and trading connectivity on-demand. This shared infrastructure service access to expertise and the latest technology, comes at a fraction of the cost of traders doing it themselves.
Speed matters – processing close to the source of the input data provides the lowest possible latency between input and response. TNS’ ultra-low latency Layer 1 technology was the first of its kind to be deployed globally, delivering direct exchange connectivity in as little as 5 to 85 nanoseconds – impressive when you consider that the human eye takes 400 nanoseconds to blink.
For London’s traders, competitive advantage comes from having the best communication links into the colocation facility, to ensure controlled and coordinated activity between different locations and markets. In fact, a complete solution must consider all the components that support a trader’s strategy in fine detail.
This requires highly specialised knowledge and engineering capabilities, including the specifics of each trading venue and data feed. It is working with an expert partner that keeps such knowledge and capability at its sharpest, providing an edge and keeping London traders at the heart of the global financial services market.
Jeff Mezger is Vice President of Product Management at TNS with responsibility for its managed services for the financial industry. He oversees product development and strategy for market data, online and data centre services.