Equinix Ramps Up Financial Services
Data-center provider Equinix is building out its financial services business across asset classes.
A big driver of this expansion dates back to February 2014, when Bats Global Markets selected Equinix as its primary data center for all Bats exchange platforms.
“As a result of the Bats win we’re getting a lot of the major dark pools and the algo engines that are moving from Weehawken (N.J.) over to us in NY4 and NY5,” said Barry Smith, managing director of global capital markets at Equinix.
Bats’ Direct Edge Exchanges EDGA and EDGX are migrating to Equinix’s NY5 data center from Equinix’s NY4 data center in Secaucus, N.J. In the second quarter of 2015, Bats’ BZX and BYX exchanges, plus BATS Options, will move to NY5 from NJ2 in Weehawken, N.J.
In foreign exchange, FXCM an online provider of FX, trading and related services worldwide, is an Equinix customer and also a licensed provider for FastMatch, a matching system for foreign exchange trading, which also leverages Equinix data centers in New York (NY4), London (LD4) and Tokyo (TY3).
“We’re seeing more players move in and globalize with us because we’re pretty much the de facto game in town for FX trading in Secaucus, London and Tokyo,” Smith said. “We’re starting to see more diversification in places like Hong Kong and Singapore. Frankfurt’s a big hub for us on the financial side. London is primary for FX, but we’re certainly seeing an uptick in Germany.”
Equinix is also seeing demand for its Cloud Exchange, which provides direct access to multiple clouds from multiple networks. “What the Cloud Exchange allows them to do is quickly flip on another cloud provider without having to incur major telecom charges, and they can do it very efficiently,” Smith said. “They can quickly switch between Amazon and Microsoft Azure, for example. We’ve targeted the top 100 cloud providers.”
Capital markets firms are moving more applications onto the cloud. “Three years ago people were talking about cloud and finance services but nothing was happening,” Smith said. “Now we’re certainly starting to see it. They are trying to figure out what their core business is and get rid of everything else.”
Algorithms have become more prevalent in the spot FX market.
QB’s Algo Suite for futures market trade execution is also being co-located to HKEX.
Breaking data silos is key to deploying automation beyond 'nuisance' orders.
They can be used on quantum hardware expected to be available in 5 to 10 years.
Streaming blocks change the basis of matching and price discovery so institutions can find new liquidity.