Most Innovative New Product: Perseus High Precision Time
This Markets Choice Award was presented on Feb. 20.
For active trading firms, anything less than precise, government-certified time increasingly isn’t good enough. Since October 2013, Perseus Telecom has sought to meet this demand with its High Precision Time product.
High Precision Time enables traders to synchronize their time systems across multiple data centers including CME Group’s data center in Aurora, Ill. As of late February, five ‘bulge-bracket’ banks and a half dozen trading firms are using the product, and the potential user base is massive, according to Dr. Jock Percy, Perseus’ chief executive officer.
“If you look every market participant that has its own proprietary infrastructure, their own service and their own devices used for electronic trading, every single one of them can count on us to deliver High Precision Time directly to those devices,” Percy told Markets Media. “You are talking about hundreds of market participants who are sophisticated who need that level of time.”
“Add to that, the regulatory changes that are coming down the pike where financial market participants are going to be asked to prove time, not just at a regular granular level for high-precision trading purposes, but to have simply the certification,” Percy continued. “For us, that’s the simplest level of service.”
The backdrop for more emphasis on time-stamping is a global market that is more interconnected than ever, with most large market participants and market operators working in multiple continents and time zones. Also, regulators in the U.S. and Europe are pushing for more robust trade reporting, a vital part of which is when transactions happened. High Precision Time ensures accuracy as low as a picosecond, or one trillionth of a second.
“Regulators want to get more granular,” Percy said. “They want to put in a standardized formulation of time so that everybody’s on the same page. Aside from the CME partnership, there has been a “considerable amount of interest” on the part of other large exchanges, Percy said.
With regard to how High Precision Time came into existence, Percy said it was about half of the impetus was from customer demand, and the other half was internally driven. “If you imagine our network infrastructure, we have probably 1,000-odd devices deployed around the world, all of which need an accurate form of time,” he explained. “Our own network performance is better measured if we have a synchronized version of time globally, so our network engineering team, reached out to the executives of our company and said they want a standardized version of time across the network.”
That led Perseus, along with ITRS Group, to develop PrecisionView, a network- and trade-monitoring tool that provides single-digit microsecond accuracy between the major markets. “When we started talking about PrecisionView to our customers, they said they would like that too,” Percy said. “That pushed us to go ahead and not just internalize the service, but to offer it as a service.”
High Precision Time costs $1,000 to $3,000 per month, which Percy said is a small fraction of the cost of buying the hardware and setting it up to do yourself. “It’s a huge savings,” he said. “We’re the ones with the responsibility for maintaining not just the state of the hardware, the GPS antennas, and the team, but also the NIST-certified devices and the NIST certifications. We take care of all of that, which leaves customers to what they should be doing — trading.”
Percy noted the utility of High Precision Time extends beyond financial markets. “It’s not a proprietary-type product, it’s a utility service,” he said. “As such, we’re happy to provide it to not just trading companies but online gaming companies, exchanges, other telco operators, other service providers, and market-data vendors.”