02.11.2013
By Terry Flanagan

International Trading Linkages Expand

The growth of electronic trading across asset classes and geographies is ushering in an era of trans-continental linkages between exchanges and other trading venues and trading partners.

For instance, in Mexico the push for low-latency trading is creating demand for high-speed connections.

CI Casa de Bolsa, a Mexico City brokerage firm, is utilizing Perseus Telecom, a connectivity provider, to provide ultra-low latency networking between the New York and Mexico City markets.

CI Casa de Bolsa has a global client base seeking liquidity in the Mexican marketplace. With U.S.-listed stocks displayed in Mexico, CI Casa de Bolsa requires an ultra-low latency network connection from New York to Mexico City for the fastest execution capabilities possible for foreign investors.

“Mexico is experiencing important growth and opportunities which has recently attracted the attention of the international financial community,” said Dr. Jock Percy, chief executive of Perseus Telecom.

In Europe, meanwhile, U.S. exchange operator CME Group is in the process of creating a London-based derivatives exchange. Pending regulatory approval as a recognized investment exchange, CME Europe will initially begin trading foreign exchange futures products and is expected to launch mid-2013.

CME is experiencing an increase in business coming from its customers in Europe, with more than 20% of its volume now originating from the region.

Having an exchange in London that can leverage the central counterparty model of CME Clearing Europe will allow CME to align itself even more closely with regional customers in both listed futures and over-the-counter markets, and provide additional opportunities to its expanding non-U.S. customer base.

“Our capabilities in Europe will expand as we launch our new exchange in Q2 and build on to the services of our European clearing house,” said Bryan Durkin, chief operating officer of CME Group in a recent blog posting.

CME’s global exchange partners also continue to play an important role in its international expansion. Within the past year, it has held discussions with the chief executives of two of its partners — Brazilian exchange operator BM&FBovespa and Bursa Malaysia Derivatives of Malaysia.

Mexican Derivatives Exchange (MexDer) has also partnered with CME Group to offer its products on the CME Globex platform and vice versa. It is also set to launch its new derivatives trading platform in March.

In addition, Dubai Mercantile Exchange, an international energy futures and commodities exchange, has migrated its contracts to the CME Globex electronic trading platform, and is using Globex to launch new products, such as the Oman crude oil contract.

“All four of these partners rely on our technology teams to provide world-class systems development and expertise,” said Durkin.

Perseus’s connecting of New York and Chicago exchanges such as Nasdaq, NYSE and CME with Mexico via the Bolsa Mexicana de Valores and MexDer enables Perseus customers to have access to ultra-low latency layer two networking.

“We enable global trading communities to receive market signals and send transactions to the Mexican exchange market at the lowest latency rates available,” said Percy of Perseus Telecom.

In turn, this allows global players to reach the Mexican exchange market in less than half of the current average latency of layer three networks that are in place today.

Related articles

  1. Agency broker moves beyond execution to offer a broader suite of services.

  2. Algorithms have become more prevalent in the spot FX market.

  3. Congress Unlikely to Act on HFT

    QB’s Algo Suite for futures market trade execution is also being co-located to HKEX.

  4. Breaking data silos is key to deploying automation beyond 'nuisance' orders.

  5. They can be used on quantum hardware expected to be available in 5 to 10 years.