In an effort to resolve a major connectivity dilemma that surfaced on 9/11, the Securities Industry Automation Corp. -- the information technology arm of the New York Stock Exchange and the American Stock Exchange -- has launched a new telecommunications initiative dubbed Secure Financial Transaction Infrastructure. Basically, SFTI is being built to ensure that members of the NYSE and Amex are equipped with redundant connectivity to the exchanges' primary and back-up data centers in the event of an emergency.
The 9/11 attacks knocked out a large Verizon switching station located near the World Trade Center, severely limiting the ability of securities firms to communicate -- both with the exchanges they transacted business on and their counterparts. Member firms of the NYSE and Amex, in particular, could not communicate with their markets, because they did not have redundant connectivity to SIAC -- the IT organization that manages the full allotment of NYSE/Amex data centers.
Ravi Apte, chief information officer of the Amex, says that, in the past, most member firms connected to the exchanges' data centers via a single point-to-point connection to SIAC. But now, he says, through SFTI, those simple connections will be backed up by fiber connections SIAC is installing in a group of so-called "communications hotels."
Via the communications lines SIAC is setting up in these hotels, Apte says, exchange members will be equipped with "100 percent redundant alternate-routing paths to the SIAC data-center locations." The hotels scheduled to take part in SFTI, he says, will be located in strategic areas across the tri-state region, as well as in Chicago and Boston. "Since there are going to be multiple hotels and redundant rings of connection ... if we lose a hotel (due to a disaster), we'll still have alternate paths to get to the SIAC data centers," Apte explains.
A NYSE spokesman says that SFTI addresses one of the key issues that forced the Big Board to shut down for four days, following 9/11. "The problem for the exchange was that so many brokerage firms lost their connectivity due to the damage to this one Verizon switching facility," he says. "SFTI addresses this by enabling the member firms to connect to our data centers via multiple communications hubs."
Apte says it will take between "one and two years" to make SFTI "fully operational." SIAC is co-owned by the NYSE and Amex.