In a move that enhances the exchange's ability to monitor trading activity and data on its systems, Nasdaq OMX Group has extended its relationship with Corvil and plans to implement CorvilNet, a systemwide operational performance monitoring system.
CorvilNet's operational performance monitoring system provides the exchange group with the ability to simultaneously analyze activity at the network, application and trading layers. The data that is captured will allow Nasdaq to alert for anomalies in real time and improve technology systems performance. Diagnostic tools may be used to track the full life cycle of a trade, enhancing Nasdaq's ability to respond to member firm queries relating to technical issues, performance levels or trading outcomes, according to Nasdaq OMX.
"This is the next step in an effort that focuses on enhancing technology that can respond to changing regulation, while also evolving our operational risk management," said Brad Vopni, senior vice president at NASDAQ OMX in an interview. "We have worked with Corvil to provide a new level of safeguards in the U.S. This allows us to continue to meet regulatory requirements."
Eric Noll, executive vice president of Transaction Services U.S. and U.K. at NASDAQ OMX aid in a statement: "The CorvilNet solution monitors and enhances the trading experience, detects complex anomalous behavior, achieves an additional level of visibility into trading events and intelligently alerts our information technology systems and staff.
[For more on how Nasdaq OMX is improving network and transaction monitoring for member firms, read: Nasdaq OMX Now Offers Packet Capture Trading Data Through QView Latency Optics.]
"We believe the rest of the industry will adopt sophisticated technology solutions as a means to reduce risk exposure in a constantly evolving electronic marketplace," Noll added. "There is a need for greater visibility to deal with competitive and regulatory forces that shape operations."
In addition to meeting regulatory requirements, the new monitoring technology will allow member firms to have more data about the transaction lifecycle, Vopni added. "We are also doing this as a service for member firms. This allows us to track the full lifecycle of a trade. And it allows us to troubleshoot for our clients with a much faster turnaround."
Nasdaq OMX will leverage CorvilNet to better serve member firms that contribute to the exchange group's marketplaces. In addition, the tool will strengthen Nasdaq's ability to ensure compliance in a fragmented marketplace with a heightened focus on transparency. Nasdaq will use CorvilNet to support regulatory functions such as tracking all outbound data feeds to member firms and the Securities Information Processors.
Nasdaq selected Corvil following an evaluation of a number of other products in the market, according to Vopni. Prior to selecting Corvil, Vopni says Nasdaq has been utilizing some internally developed monitoring technology and some vendor solutions. "We have had home grown monitors that the engineering teams have built out, and we have used vendor solutions before," he said. "Putting all of those technologies together is a challenging process" and Nasdaq determined that using Corvil's technology is the best choice, Vopni added.
"As an exchange, we are focused on our uptime and reliability," Vopni said. "We take the operation of running the exchange very seriously. Corvil has the ability to scale, which is very important. The interface is incredibly user friendly and we can look at every piece of information in every packet." Nasdaq handles approximately 25 billion messages per day, or about 1 million transactions per second during trading hours.
CorvilNet uses dedicated network-attached data appliances, which acquire data passively from the network wire, thereby avoiding any extra burden on trading system components, according to Corvil. After time-stamping all acquired data, the system provides real-time decoding of the content within the data, allowing it to expose all data fields from hundreds of market data, order flow and middleware protocols. This allows users to search, filter and process captured data based on order IDs, client IDs and other meaningful application-layer data fields, in real-time.
Corvil is utilized by a number of other exchanges and financial firms, including CME Group, NYSE Euronext, ISE, CBOE, LSE, Deutsche Bank, Credit Suisse, Morgan Stanley and others. "This announcement represents a huge step for us," said Donal O'Sullivan, vice president of Product Management at Corvil in an interview. "A couple of years ago we announced a partnership with Nasdaq that focused on transaction monitoring. Today, Nasdaq is using the solution to help optimize the operational performance of the exchange group."
"Many monitoring tools and architectures struggle to deal with the high volume, variety and velocity of data present in the world's leading electronic exchanges," said Donal Byrne, Chief Executive Officer of Corvil in a statement. "Tapping into the network wire is the most effective method to achieve this but it requires a sophisticated system than can transform the unstructured wire data into operational context and business intelligence in real-time. This is what our platform provides thus making it possible to build a new generation of independent visibility, detection and control systems that greatly reduce risk and improve the orderly operation of electronic trading systems."