Top exchanges expanding customer access models, tapping “information hubs” in new geographies
Equinix, Inc. (Nasdaq: EQIX), the global interconnection and data center company, today announced that it is seeing a rapid increase in stock exchanges extending their customer access models by placing electronic access nodes in foreign markets. Already home to more than 75 exchanges and trading venues around the globe, Equinix has recently announced new projects with the Toronto Stock Exchange (TMX), New York Stock Exchange (NYSE), Australian Securities Exchange (ASX), and Moscow Exchange (MICEX RTS). Equinix also announced today that MIAX Options Exchange (MIAX) has selected Equinix International Business Exchange™ (IBX®) data centers for its primary, backup and disaster recovery sites for its new options exchange trading platform.
For more than two decades, the expansion of electronic trading in financial markets has brought lower costs and a greater ability to manage risk in the increasingly complex global economy. Accelerated by the Great Recession, this long-term trend has also put pressure on margins across the trade cycle, forcing both incumbent and upstart venues to diversify their investor base by expanding customer access models to attract valuable multinational customers.
“Since 2011, we’ve seen a more than fivefold increase in the number of venues reaching outside their home markets,” said John Knuff, general manager, Global Financial Services for Equinix. “The trend is being driven by a steady broadening of trading strategies that extend beyond a single venue, geography or asset class. As markets become more interrelated, investors are seeking local access to foreign markets and forward-thinking exchanges are delivering these types of solutions in greater numbers.”
Knuff is seeing a huge upsurge in 'multi-asset connectivity' as trading firms position infrastructure among numerous venues within the same facility, or data center campus, that trade both the same and diverse instrument types. The major caveat, he adds, is the physical proximity of these firms to multiple trading venues, data sources and counterparties. “Distance from key financial cities is the barrier for firms trading on multiple venues. If they can access your exchange’s data locally, that eliminates this barrier. If they have to long-haul the data, then that can present a problem”, Knuff explained. “The value in cutting-edge software and systems is only present if those assets are well-connected, wherever possible, to the markets and data sources that firm employs.”
When exchanges deploy access nodes and provide market data inside liquidity hubs — or “information hubs” â trading venues are giving trading firms the ability to connect to multiple global data sources from one location. In an environment where both speed and efficiency are critical to not just success, but viability, information hubs are enabling these organizations to trade smarter while maintaining agility.
Platform Equinix™ provides an entire financial services ecosystem of more than 725 business including exchanges and trading platforms, top market data vendors, a myriad of service providers, and hundreds of buy-side and sell-side firms.