NYSE Picks Up Pace on Global Network of Trading Hubs
February 24, 2011
NYSE Technologies indicated Thursday night that it was speeding up the creation of its global network to connect traders and trading venues.
Stanley Young, the chief executive of the technology services arm of NYSE Euronext, said the firm could build as many as 20 "liquidity hubs" in data centers in different parts of the world by the end of 2011.
This is the number Young indicated at the end of November that might take it until the end of 2012 to build.
"We're building about 20 hubs this year," said Young. "Building meaning we're going to be taking space in data centers that already exist where there is a liquidity pool, whether it's a national market or a dark pool.''
The "hubs" will be located in facilities operated by data center specialists such as Savvis, Equinix and Telx and are aimed at creating a "global community of traders" that rely on its trading plant, supported by market data and order routing to exchanges in all significant financial centers.
"So if I am a trader that happens to sit in the Midwest and I want to execute trades on 40 or 50 exchanges around the world and I am permissioned to do that ... I can get them there,'' Young said Thursday evening at the Microsoft Technology Center on Avenue of the Americas in New York.
Microsoft applications, he said, will be a "core part" of this trading platform, going forward.
NYSE Technologies, he said, will be creating application programming interfaces as well as a software developer's kit that will let programmers rapidly develop applications that run on this worldwide trading "fabric."
The developers will be able to test their programs against 30 years of tick data and, once ready, the programs will "launch on a platform that is connected to 1,000 firms worldwide,'' he said.
Disclosure of the apparent speedup of the timetable for opening liquidity hubs comes one week after NYSE Technologies' parent company, NYSE Euronext, said it planned to merge with the operator of the Frankfurt exchange, Deutsche Borse.
In November, Young said about 20 of the roughly 1,000-square-foot hubs would be set up in the next two years, Young said, and as many as 20 more by the end of 2013.
Among the hub sites this year will be Toronto, Chicago, Sao Paulo, Hong Kong, Tokyo, Singapore, Frankfurt, Brussels, Amsterdam, Paris and three in London.
The small hubs are extensions of "anchor hubs,'' in Mahwah, N.J., and Basildon, England, that cost NYSE Euronext roughly $500 million to build.
The initial capital investment in each “liquidity hub’’ is much less, likely to be on the order of $50,000 to $100,000 each.
The hubs are connected by NYSE's Secure Financial Transaction Infrastructure, which, for instance, it extended to Mexico this week.
"The whole premise,'' of what NYSE Technologies is doing, he said when speaking at the Microsoft center, is "taking the friction out of global trading for as many firms as we can."