01.20.2012

NYSE Looks to Canada

01.20.2012
Terry Flanagan

NYSE Technologies’ launch of a new liquidity center in Toronto is part of the company’s growth strategy in the nation.

“The goal behind the Toronto liquidity center, as part of our global community strategy, is to build these liquidity centers around other markets and to help facilitate trading,” Don Henderson, chief technology officer of NYSE Technologies told Markets Media. “Our overall goal is to build this global infrastructure to be leveraged by the industry. Toronto is one of the core markets to be in, as it gets us a footprint into trading in the Canadian markets.”

NYSE Technologies’ Toronto data center is the latest in a network of global liquidity centers. It joins existing centers in Mahwah, N.J., Chicago, Basildon, Essex in the U.K and Tokyo. 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. It plans on adding more liquidity centers in the coming months as part of its overall growth strategy.

“We are driving all of our global growth for our product offerings through our liquidity centers,” said Henderson. “These are environments that we can build and deploy our new technology in that will help empower the global capital markets community to more efficiently and effectively execute their global trading strategies.”

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. Latin America has Mila, which connects the domestic stock exchanges of Peru, Colombia and Chile, with Mexico to join in the near future.

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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