Chilean Stock Exchange streamlines securities transactions with IBM

10 December 2008

IBM (NYSE: IBM) announced today that it had signed a deal with the Chilean Stock Exchange for the delivery of a new securities trading platform that will speed transactions and provide better communication with other exchanges worldwide. The new trading platform is a key part of a modernization programme to position the exchange for the higher velocity, low latency, high transparency market environment of the future.

The Transactional Stock Exchange’s new high-performance, ultra-low latency trading platform will not only improve the flexibility, scalability and security of the service that the exchange provides to its corporate clients, but will also allow the exchange to optimize its electronic transaction management. This will allow the exchange to increase its capacity to over 3 thousand orders per second, 100 times greater than at present, and reduces its latency to 2 milliseconds, 100 times lower than its current level.

The platform upgrade will position the Chilean Stock Exchange in the vanguard of the world’s regional exchanges, and allow it to leverage its strategic alliance with the Mexican Stock Exchange, which will start operations in 2009, as well as relationship with Bovespa, where its enhanced connectivity and throughput will allow it to increase order process capacity to 100 times its current level.

"This agreement will mean a major breakthrough in the quality of service delivered to the Commodities Exchange, allowing it to compete as the financial markets become ever more high velocity, low latency, and high transparency in nature. It will also enhance the exchange’s flexibility, scalability and security," said Luis Siles, general manager of IBM Chile.
Jose Antonio Martinez, general manager of Santiago stock Exchange declared, "The new transactional engine of the Santiago Stock Exchange will process more than 3,000 orders per second with latency measured in microseconds and under the concept of total connectivity. This will provide direct access to the market, with the connection systems routing and handling orders and programs and connecting customers with traders. This platform, in addition to incorporating automatic processing of orders, new forms of negotiation and many advances in functionality for our customers, is built on the latest generation of architecture. Featuring blade servers, data networks for servers based on InfiniBand, IBM WebSphere MQ Low Latency Messaging as a data transport bus, Red Hat Linux as the operating system with basic communications protocols and SOAP FIX, having been developed exclusively in the JAVA programming language."

The new Chilean Stock Exchange securities trading platform is based on IBM WebSphere MQ Low Latency Messaging technology.

About three years ago IBM predicted that latency would not only become a vexing issue in financial markets but also a liquidity-generating tool for exchanges, as well as Multilateral Trading Facilities (MTFs) and Electronic Communications Networks (ECNs). Consequently IBM labs started the development of IBM WebSphere MQ Low Latency Messaging, a messaging transport that provides ultra-low latency connectivity to exchanges and electronic markets.

IBM WebSphere MQ Low Latency Messaging has since been refined considerably with Version 2.1 offering native Infiniband, in addition to IP over Infiniband, to further boost both throughput and reduce latency, while providing the ability to easily switch between InfiniBand and Ethernet..

IBM WebSphere MQ Low Latency Messaging Version 2.1 also incorporated broader application programming interface (APIs) support, and a higher level of reliability via a group of functions known as Reliable and Consistent Message Streaming (RCMS). RCMS allows users of the transport to create a replicated messaging environment to provide failover capabilities in the event of an outage with the live environment. This includes the ability to sequence each data packet to ensure that data packets are accurately ordered across both live and replicated environments, with automatic failure detection and failover capabilities.

IBM WebSphere MQ Low Latency Messaging has also been integrated with IBM’s front office technology obtained through the acquisition of InfoDyne to create a new platform, WebSphere Front Office for Financial Markets V3.0, to help banks and other financial institutions quickly and confidently integrate multiple streams of market data and to deliver that data to applications to help conduct transactions with reduced latency.

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