In order to mitigate the risks of inaccurate time stamps when disseminating and trading on sensitive market information, firms are implementing precision time stamps based on the atomic clock operated by the National Institute of Standards and Technology in Boulder, Colo.

Perseus Telecom offers a High Precision Time service which clients can plug into at their data centers. “It gives traders an accurate time stamp from when the data packets flow in and out of their systems and stamps their trades,” said Anthony Gerace, president, global financial services at Perseus Telecom.

Perseus has deployed the HPT service at the Equinix data center in Secaucus, N.J., the Coresite K Street data center in D.C., and the Savvis NJ2 center in Weehawken, N.J., among others, “We’ve set up base infrastructure within these data centers, and the client simply orders a cross-connect from the data center operator themselves into a switch that we have built into the rack.”

Finra rule 7430 requires that all computer system clocks and mechanical time-stamping devices be synchronized to any source within one second of the National Institute of Standards and Technology standard. All clocks and time-stamping devices must remain accurate within a one-second tolerance of the NIST clock, including the difference between the NIST standard and a time provider’s clock; transmission delay from the source; and the amount of drift of the clock.

The High Precision Time service offers Network Time Protocol (NTP) and Precision Time Protocol (PTP) connectivity with nanosecond accuracy to the Coordinated Universal Time UTC timescale.

“The difference between the multiple high-precision time offerings is that you’ve got a drift from your clock that’s on the server compared to the atomic clock in Boulder, Colorado,” said Gerace. “So an NTP could drift quite a bit up to, 200 microseconds versus the next layer which is PTP, which is roughly 50 microseconds, and then you get into PPS, which is roughly plus or minus 1 nanosecond. So it’s a little more costly to go up the stack. It depends on the frequency of your trading, the volume of your trading, and the sensitivity of the trading.”

Nasdaq is providing the HPT service at its own Carteret data center, traders to synchronize their time systems across a multitude of data centers. The service can be used as clients’ primary time service, or as a back-up for clients which already use Nasdaq’s shared GPS service or have their own dedicated GPS antenna.

“Our adoption of Perseus’ precision time service is another example of our commitment to provide member firms with technology solutions that reduce risk exposure,” Stacie Swanstrom, head of global access services and senior vice president of global trading and market services at Nasdaq, said in a release.

Featured image via peych_p/Dollar Photo Club