Nasdaq Pushes Technology

Terry Flanagan

The global exchange operator will continue focusing on growing its technology business, including further enhancing one of its key offerings, the Genium INET system.

“The Genium INET technology is functionally rich, and covers all asset classes, so you can execute in separate matching engines or have it all integrated,” said Lars Ottersgård, senior vice president of global technology services at Nasdaq OMX. “You have all the functionality that you need included.”

Nasdaq OMX recently announced a deal with global interdealer broker ICAP, whereby its BrokerTec electronic fixed income business would use a modified version of the Nasdaq OMX Genium INET system. The new system provides low latency and high throughput, as well as built in capabilities for manual traders.

The upgraded BrokerTec trading platform retains all the functionality previously available on the system, and is built using technology which enables BrokerTec to increase order volume tenfold and decrease order input latency by as much as 50 times in some cases. The platform’s average latency is now less than 200 microseconds, with previous average latency approximately 10 milliseconds. BrokerTec will complete its global upgrade by the end of April.

Users of BrokerTec include JPMorgan and Bank of America Merrill Lynch.

The Genium INET technology was formed through the merger of Nasdaq and OMX in 2008, when the companies integrated their technology offerings. The platform is touted as one of the fastest and fully functional trading systems in the world. It provides the backbone for the Singapore Exchange’s Reach trading system, which is said to be the fastest in the world, as well as underpinning the system powering the Australian Securities Exchange.

“Genium INET is incredibly feature-rich, so a lot of work is on the configuration for clients, not on development,” said Ann Neidenbach, senior vice president of global software development at Nasdaq OMX. “We are open to working with customers to understand development requirement, but we also let them understand what functionality we have already built.”

The Genium INET technology usually receives two or three core updates per year, depending on what the current focus area for improvement is. While the system is already all-inclusive, Nasdaq is always open to working with clients to jointly develop functionality and to reduce latency. The technology used at Nasdaq’s own trading system is capable of sub-40 microsecond speeds, processing more than one million messages per second.

“We are constantly adding functionality,” said Neidenbach. “As we add new clients, we build new functionality into the core and then make it available for other clients. We also look to add new features.”

Looking ahead, Nasdaq OMX’s technology group will look toward upcoming regulation as an opportunity for growth.

“We’re seeing a great deal of interest in London with Mifid 2 and EMIR, of companies looking to take their existing dark pool or crossing network, and move it into a regulatory compliant software,” said Neidenbach. We’re looking to provide regulatory compliant software that gives clients the flexibility to move as regulations change.”

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