SunGard has launched an ultra low-latency direct-market access (DMA) service for Pan-European equity markets through its European broker-dealer, Valdi Execution Services. Valdi focuses on the ultra-low latency requirements of high-velocity traders, providing a broker-managed solution that includes clearing and settlement.
Initially, the new DMA offering will connect to the BATS and Chi-X MTFs, and will then extend its connectivity to Turquoise and the London Stock Exchange. Pan-European market access will also be offered following the initial deployment.
In Europe, research firm Aite Group estimates that the current 25 percent volume share of high frequency trading will reach over 40 percent by 2012, and the adoption of DMA is expected to increase to 70 percent during the same period, according to the release.
Measuring latency latency in microseconds, SunGard’s Valdi Execution Services maintains high capacity, stability and resiliency, said the company in its press statement. Customers can easily code to the service’s FIX API for rapid time-to-market, according to the press statement. The DMA access infrastructure is centrally deployed, and exchange co-location and distributed infrastructure are also available to help decrease latency and increase time-to- market. A pre-trade risk management layer is included, to help further reduce latency by eliminating hops in the transaction process, noted the release.
In a statement, Sang Lee, a co-founder and managing partner at financial markets research and advisory firm Aite Group, said, “The European equity markets are characterized by increasing liquidity fragmentation, burdening trading and brokerage firms with rising operational and infrastructure costs in order to access liquidity. As a result, high frequency trading is expanding in Europe and the demand for low-latency market access continues to grow and more firms will look to utilize direct market access (DMA) to remain competitive.”
According to Raj Mahajan, president of SunGard’s trading businessin the same press statement, said, “SunGard brings in-depth expertise to changing regulation, market structure and trading venues via our own memberships throughout Europe. Our neutrality and provision of integrated risk management tools within the Valdi ultra low latency DMA platform provide the competitive advantage high velocity traders need to help reduce latency and increase speed to market.”