Role of Technology inMarket Development

Tony Weeresinghe

• Technology Role is proven beyond doubt

– Increase in Liquidity– Increase in revenue– Increase in Profits

The Scenario

The only way to survive

Role of the Exchange

The Role is ChangingStock Exchange Sell Side Firm

Buy side Firm

Regulations

• Reg NMS

• MifidInstitutions

Internalization

Stock Ex_1

Stock Ex_2

ECN

Dark Pool

SMART ORDER ROUTER

Futuristic Exchange• Enterprise Nervous System (ENS)

– Must be able to support multiple asset classes– Flexible to cater for Market Demands– Link to Multiple Business Process Networks

(BPN) to access a larger participant audience.– Standards – Bullet Proof Surveillance– Easy Clearing & Settlement– High Capacity Performance– Latency almost at Zero– Maintain a very low cost structure

• Outright products;Equity

Exchange Traded Funds (ETF’s)

Fixed Income (Bonds, Bills)

Commodities

Energy

• Synthetic products;Futures

Options

Repurchase Agreements (Repo)

Swaps/ Spreads

Multiple Asset Classes

Heterogeneous partition

Liquid scripts Options

• Numerous types of ordersMarket, Limit, IOC, FOK, DAY, GTC/GTD/GTT, AON, Min Fill, Drip, Iceberg, Contingent, Pegged, Managed, Implied, Partnered, Only Best, Indicative, Cross, OTF, FAF…

• Various kinds of matchingContinuous/Auction, Time Priority/Parity, Negotiation, Price Improvement, Selective execution, Selective priority, Execution price control, Spread control, Away market routing, Credit checks, Exposure checks, Balance checks…

Market Demands

Connectivity

• SOR

Standards

• FIX Protocol– 4.2– 4.4– 5.0

• Messaging– Swift

• Online event driven system using

• Advanced Pattern Recognition

• Multi-Dimensional view with Graphics

• Market Replay

• Case management

• Pattern Mining tools

• In built report utility

Surveillance

• T+?

• Trade for Trade

• Contractual

• Institutional Delivery

• Link to RTGS

Clearing & Settlement

Partition 1 10000/sec Partition 2 10000/sec

High Performance

100,000 orders per sec, under 1ms

Sequencer

MatchingEngine

MatchingEngine Mirror

Distribution Server

Order Cache

Asynchronous Database

Logger

External Information

Server

Market Replay Agent

GatewayDriver

DMA Gateway

Reporting Gateway

Clearing Gateway

Feed Handers

Front-End Driver

API Driver

Order Gateway

Gateway Controller

Market Data Server

Authentication Server

Service Desk

Exchange Manager

Market Manager

SOD/EOD

Query Server

Warm Start/Transaction/

System Replay Agent

Market Replay Server

Regression Test Tools

GUI Configuration

Server

Matching Partition

Market Manager

Exchange Manager

Market Replay

Gateway Controller Service Desk

Interfaces to External Systems

Services

Multicast Data

Database Access

File Store

Core Matching

Trader Workstation

Latency <1ms

Lower Cost of Acquisition

Creating the Pan African

JSE

Comm.

MSE

GSE

NSE

SOR SOR

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Thank You

tony@millenniumit.com