Measuring Up: FIX Inter-Party Latency Update

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Raymond Russell, Julian Ragless, Richard Leung  |  Corvil, Hong Kong Exchanges and Clearing, Ltd  |  December 15, 2011
Measuring Up: FIX Inter-Party Latency Update

Richard Leung, Hong Kong Exchanges and ClearingWhat is HKEx’s plan to engage with latency sensitive traders?
We operate a central market and have many constituents, some of whom are latency sensitive and some who are not. We try to balance these needs throughout our platform evolution. The most immediate example is AMS 3.8, which will bring our average latency down to 2 milliseconds, excluding the broker network and gateways. If you look at those 2 milliseconds, however, more than half of the latency is taken up synchronizing our primary site with our Data Recovery (DR) site so this every order is stored on the DR site before an acknowledgement is sent back. We have historically done this because if there is ever a disaster that requires us to failover to our DR site, we guarantee that all the orders will be there. You cannot do that if you are offering ultra low latency because of the speed of light. Our concern for market integrity keeps us from reducing our latency further.
 
Another example is our data centre, which is under construction and due for launch in 2012. Our bigger goal is to build an ecosystem of financial market participants, including connectivity and other service providers that can add value to participants that choose to host within that facility. A final example is our market data system, which we plan to rollout in 2013. Here again, we provide a range of market data products, some of which will be tick-by-tick aimed at algo traders and some will be conflated feeds for screen-based traders. Our strategy is to address the needs of latency sensitive traders while balancing the needs of all participants, rather than focussing on one segment of the market.
 

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