12.20.2011
By Terry Flanagan

NYSE Looks Abroad

The technology unit of NYSE Euronext has opened a new liquidity center in Tokyo, allowing customers to trade in Japanese securities.

NYSE Technologies has launched a new data center based in Tokyo, the latest initiative of the technology unit, which will offer customers high-speed, low-latency access to the fast-growing market.

“In working with our customers to identify their primary trading needs and opportunities, we found that Tokyo and the surrounding Asian markets were a very high priority,” said Stanley Young, chief executive officer of NYSE Technologies. “Our Tokyo Liquidity Center addresses those needs with a powerful blend of proven, familiar NYSE Technologies services with seamless connections to all major Tokyo markets.”

NYSE Technologies’ Tokyo data center is the latest in a network of global liquidity centers. It joins existing centers in Mahwah, N.J., Chicago and in Basildon, Essex in the U.K. The data centers allow investors, particularly high-frequency trading firms, access to low-latency connections by placing them as close as possible to the various NYSE Euronext exchanges’ matching engines. NYSE plans to open additional centers in Toronto and Brazil in the coming months.

The data center launches follows closely in the footsteps of a recent announcement that NYSE was working with the Tokyo Stock Exchange in a partnership whereby they will each offer interconnectivity between each other’s trading platforms. The mutual connection between the TSE and NYSE is formed between the TSE’s Arrownet and NYSE’s Secure Financial Transaction Infrastructure. Although new services to utilize the new infrastructure are planned for the second quarter of 2012, the connection between the two networks has already been installed and NYSE Technologies will begin distributing TSE market data shortly.

The connection is one of the latest in a line of cross-border connections to be formed between exchanges. Deutsche Borse recently announced the formation of a mutual development partnership with the Istanbul Stock Exchange, under which the two exchange operators will work together in several business areas, including the development of new research and technology, assisting each other in marketing efforts, as well as introducing joint indices, in an effort to create a closer cooperation between Frankfurt and Istanbul.

Global exchanges have been under increasing pressure in recent years as trading volume has declined and competition has increased. Many have looked toward alternative streams of revenue, including offering services and market data. NYSE perhaps has been the most successful in this regard. Its NYSE Technologies unit is estimated to be a billion dollar business, and accounts for as much as 20% of NYSE Euronext revenue.

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