Accelerator Card Manages Access Risks in Nanoseconds
November 28, 2011
Celoxica has launched an ultra-low-latency circuit card that accelerates the execution of risk checks for broker dealers who offer sponsored access to U.S. markets.
The accelerator speeds compliance with the with the Securities and Exchange Commission’s new market access rule.
Often referred to as the "Naked Access" ban, the new regulation known as Rule 15c3-5 requires U.S. brokers to conduct extensive pre-trade risk management and credit checks on all client orders executed on U.S. exchanges and U.S. alternative trading venues. The final deadline for complying with the rule is November 30.
Celoxica, which specializes in low-latency order routing for high-frequency traders, says that the new Accelerated In-Line Risk (AIR) management card relies on the use of field-programmable-gate-array (FPGA) technology. Such gate arrays can be programmed and reprogrammed on site.
The card will be placed in a trading customer's server, which typically resides in a co-located or nearby hosted server and can be monitored by the sponsoring broker.
Using the card, broker-dealers can offload certain processing functions to hardware which ensures that perf checks for such risks such as fat finger errors, position exposure limits and order throttling are applied.
“The additional rules that need to be applied to sponsored access trading meant there were likely to be performance implications,” says Lee Staines, president of Celoxica. “Risk checks would need to be applied before trading occurred so the additional functionality translates to additional latency.”
With the card, such checks can be performed in less than 400 nanoseconds, Celoxica claims.
"We've put a significant amount of research and development during the last year into building an ultra-low latency, hardware accelerated pre-trade risk management solution with the goal being to eliminate the latency impact of Rule 15c3-5," says Staines.
