As global markets have evolved over the last few decades, the move to electronic trading has resulted in the ability for market participants to connect to multiple markets through common interfaces - a major victory in terms of efficiency and transparency. This move demonstrated the central role of exchanges as providers of market data, which in turn brought up the question: How do market participants connect to and access that information?
The range of data available is rising, and accessing and analyzing that data in real time is increasingly important.
“Safe, reliable connectivity to market data is crucial for businesses. Being offline drives risk - for example, getting locked into orders you can’t close or not being able to action or close orders on behalf of your customers - that can be avoided with the right solution,” says Demetrios Skalkotos, Global Head of Connectivity for ICE Data Services.
In the aftermath of 9/11 when services and network outages were widespread, new vulnerabilities in the connectivity methods market participants had been using were brought to light.
“We realized that the connection methods market participants were using weren’t as diverse as they needed to be,” says Skalkotos, “and that the market needed a centrally managed, more resilient connectivity infrastructure.”
Following 9/11, the government asked exchanges to manage core connectivity back to the exchange to help facilitate faster service restoration in the event of future disasters. The result was the formation of the Secure Financial Transaction Infrastructure® – or SFTI® (pronounced “safety”). Backed by the financial services community, a number of companies came together to build the SFTI network, which introduced several new security and high availability measures to exchange connections:
“SFTI brought a new standard of resiliency to the financial marketplace,” continues Skalkotos. “It aggregates the traffic of multiple customers onto a core network that is specifically engineered for high availability. It provides market participants with diverse, redundant access that enables their businesses to continue functioning in the event that a disaster compromises any single connection.”
As the markets themselves have grown and evolved, market participants’ need for increased amounts of data delivered quickly has grown in response.
“What we’re seeing now is participants in the equities markets focusing more on speed and low latency connectivity that allows them to consolidate data in the highly fragmented environment and execute orders quickly. For futures and options market participants, on the other hand, we're seeing more of a trend toward accessing large amounts of data that support the full trading workflow from front-end reference data to back-end clearing services,” says Skalkotos.
The SFTI team quickly responded by increasing its connectivity products to include secure connection methods designed specifically for speed and staying ahead of the demand for volumes of data. For customers requiring optimum latency over redundancy, SFTI now offers new, low latency data feeds and is increasing backbone capacity to transport up to 100 Gbps through its U.S. telecommunications network; and there's a review of European capacity underway. The team has also worked to increase customer connections from 100Mbps in 2011 to 40Gbps in key U.S. locations and up to 10Gbps in Europe. These new connectivity products enable customers to choose from a broader suite of SFTI products tailored to meet their needs.
Today, SFTI is a secure, purpose-built, private multi-participant network that provides connectivity to global exchanges and content service providers via dedicated data circuits designed to avoid a single point of failure across the network. The SFTI network enables customers to connect to over 120 global markets and content service providers including NYSE, ICE global markets, alternative trading systems, clearing and settlement services, and market data vendors.