Wednesday, June 22, 2011

Stock Exchanges Ain’t What They Used To Be

from Forbes:

>>John Knuff, general manager of global financial services at Equinix, said his company serves 50 global exchanges, including 8 of the top 11. It provides secure POPs (Points of Presence) to the NYSE all over the world.

“Typically we have the exchange infrastructure in our data centers for two purposes. One is to provide access nodes where the exchange creates a POP for customers to access their infrastructure. The second model is the exchanges put their matching engines in the center.”

For example, Equinix provides an access node for the Australian Security Exchange from the Equinix Chicago data center so firms in Chicago can connect directly to the Sydney Futures Exchange. Exchanges which place their matching engines in Equinix centers include the ISE, Direct Edge and the CBOE C2.

The NYSE completed their customer access strategy first, with Equinix providing its Secure Financial Transaction Infrastructure (SFTI) POPs.

“Now they are overlaying products and services on top of that. Having been in the markets running an infrastructure for electronic trading, I have seen that aspect is sometimes forgotten — how are people going to get to this exchange? I think one of the advantages of the NYSE offering is the on-ramps which make it easy to get to their service offering.”

He sees this attention to customer access as a fast-moving trend.

“in two years, most of the exchanges will have a global presence, especially the top 15 or 20. They will have storefronts in the major financial markets like ASX in Chicago. Once once they have that access strategy and a reach, it is easy to access their product and service offerings from anywhere in the world, then they can layer on services like the NYSE plans.”

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