Low Latency Route to JPX Launched

Terry Flanagan

KVH Co. Ltd., an information delivery platform headquartered in Tokyo, will begin offering the Japan Exchange Group (JPX) Co-Location service (OPEN) to access Osaka Securities Exchange’s (OSE) derivatives trading system (J-GATE) in a low latency environment.

The offering, a first for a nonmarket-member in Japan, enables KVH to provide international and Japanese institutional investors with high performance colocation services to OSE’s J-GATE trading system, reducing the speed from client to matching engine down to 2.4 microseconds.

Tokyo Stock Exchange (TSE)’s derivatives market will be integrated with Osaka Stock Exchange in March 2014. It will result in products such as the highly traded Nikkei 225 futures and options transactions, OSE’s DJIA futures, TOPIX futures, and Japanese Government Bond futures and options being traded on the J-GATE system. JPX (OPEN) provides access to all of these products in an ultra low latency environment.

“We are excited to be offering the JPX (OPEN) Co-Location service as it fully complements our portfolio of services specifically designed for the low latency trading community in Asia,” said Takao Hirai, senior vice president, enterprise market division of KVH. “By providing KVH’s high quality global IT infrastructure services to OSE market participants, we are confident that we will be able to support the derivatives trading market in Japan and improve OSE’s foothold in Asia.”

Combining high-speed optical fiber networks with data centers located close to major domestic exchanges, KVH Proximity Services provides a hosting environment for ultra low latency trading transactions that include multiple exchanges from a single location.

OSE adopted trading technology provided by Nasdaq OMX for its trading platform for derivatives products J-GATE, which it launched in 2011.

The launch of J-GATE delivered improved processing capabilities, such as reduced processing latency, and enabled the introduction of market rules and functions employed by major overseas exchanges, which further enhances the competitiveness of the OSE’s market.

OSE decided on “J-GATE” as a name of the next generation derivatives trading system for making its derivatives market well known to and used by a wide range of local and overseas investors. “GATE” stands for “Global Access Trading Engine.”

In addition to KVH offering JPX(OPEN) Co-Location services directly to the trading community, KVH provides end-to-end solutions consisting of international leased line services, consulting, equipment procurement and set-up as well as testing of various servers and remote monitoring to deliver a one-stop shop solution to trading firms.

With KVH’s 24/7 fully bilingual Japanese/English support services, international institutional investors with limited or no local Japanese presence are able to outsource full operations of their trading equipment to KVH and benefit from a lower cost of entry into the Japanese market, the company said.

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