Options IT Links to Australian Securities Exchange
September 7, 2010
Options IT on Tuesday said that users of its PIPE Velocity low-latency market connectivity services can now connect to the Australian Securities Exchange (ASX) and receive market data from the exchange.
The deal brings the total number of markets available via the PIPE Velocity services platform to 32 and comes amidst the ASX’s potential competition with new alternative trading platforms made possible by the Australian Securities and Investments Commission taking over supervision of trading in the country from the ASX before year-end.
The ASX initially tried to bar the issuance of new licenses to rival platforms, saying it could create market volatility. But the ASX has been recently been cooperating with ASIC in transferring supervisory responsibilities.
“The Australian market is becoming increasingly attractive to our clients, due in large part to the significant transformation currently underway at the ASX,” says Nigel Kneafsey, chief executive officer of Options IT, the London-headquartered firm that provides infrastructure-as-a service to fund managers and broker-dealers. “As the markets become faster and more efficient, leading to lower costs and higher volumes, we believe client demand to trade the Australian market will continue to grow.”
The ASX is expected to launch a revamped trading platform called Genium INET in October and additional alternative trading systems will go live shortly thereafter beginning with Chi-X Australia in early 2011. Chi-X already operates alternative trading platforms in Europe and Canada.
Both Liquidnet and AXE ECN, a joint venture between the New Zealand exchange operator NZX and a consortium of six global investment banks and brokerages, have also submitted applications to set up exchanges in Australia.
The ASX claims that its new trading platform will cut the average time to execute a trade from three milliseconds down to 250 microseconds; a microsecond is a millionth of a second while a millisecond is a thousandth.
The new system, provided by Nasdaq OMX Group, will also allow the ASX to execute more than five million trades a day rather than two million.
