London Exchange Joins Fast Bandwagon
March 2, 2009
The London Stock Exchange (LSE), following the lead of venues such as NYSE Arca, BATS Exchange and the Chicago Mercantile Exchange, is preparing to accept messages in the Fast, or FIX adapted for streaming, protocol.
Fast, launched in 2005 by FIX Protocol Ltd. (FPL), optimizes market data, accelerating its transmission to users' trading systems. LSE currently multicasts that data to its customers via proprietary formats. "Fast will generate encoded versions of these," said a source at the exchange. "The templates allow the reconstruction of the fixed-width messages, enabling customers to convert the messages into their own internal format."
Alastair Fairbrother, spokesperson at LSE, which had been pilot-testing Fast, declined to provide an implementation date, but a person with knowledge of the project suggested it will happen this year. New snapshot services for market data--part of the exchange's integration with Borsa Italiana, acquired in 2007--will be the first to use Fast, said Fairbrother. LSE is "in the process of defining our longer-term strategy for our existing level-one and full-depth services," he added.
Kevin Houstoun, co-chairman of FPL's global technical committee and a consultant for HSBC, noted that the move represents not only a step forward for Fast but for the latest version of FIX. LSE, he said, will use FIX 5.0, with the soon-to-be-released service pack 2, for its trading interface, including order submission and the dissemination of quotes. However, added Houstoun, because FIX and Fast are open specifications, implementation is up to the user. "If you make your specification available to everyone free of charge, you cannot be sure it will be implemented well," he said.
But customization does not appear to be a priority for LSE. "This is about buying into the benefits" of standard application programming interfaces, said the LSE source. "We want our customers to be able to easily source Fast decoders. Therefore, we want our implementation to be as vanilla as possible." He added that "a conformance service and accreditation service for third-party software will be in place to support customers in migrating to the service."
"Latency was the original motivation for the LSE's interest in Fast," explained Fairbrother. "The rise in peak trading volumes, particularly the sub-second spikes in messaging, have meant that the compression is also now of interest."
Chris Phipps, product manager at Stockholm-based trading technology provider Orc Software, which offers the CameronFIX platform, noted that “with any new technology deployment, it makes sense to start slow and roll it out as proof that it’s working comes in.” He added that LSE “appears to be waiting to see how the FIX 5.0 implementation goes with a native feed before implementing Fast.”
