Gearing up to expand internationally, BATS Trading picked Savvis Inc.'s Dockland's data center in London to host its new European equity-trading platform. BATS expects to launch the new platform before the end of this year.
Over the past two years, BATS has become the third largest U.S. equity market center, garnering nearly 10 percent in matched U.S. market share. Last month, it announced plans to enter the European equities market where other rivals are headed or already operating due to the Markets in Financial Instruments Directive.
"With the advent of MiFID, there is real demand in Europe for access to global markets and, in order to make international trading successful, we must replicate the same speed and responsiveness we've displayed in the U.S.," stated Ken Conklin, SVP in chart of business development at BATS in the release.
With BATS coming into the Docklands data center that could pull in other exchanges and alternative marketplaces, suggests a Savvis spokesman. Market participants that execute orders via BATS would presumably use other exchanges for trading Pan European equities, and customers of BATS would want to host their trading strategies in close proximity to these exchange servers in the same data center. Because the Savvis data center is in close proximity to London's financial district, ensuring the lowest possible latency, it will make the transaction process faster for algorithmic traders, according to the release.
Savvis has hosted BATS Trading via its Jersey City, New Jersey data center since its inception in the United States in 2006 and has provided Proximity Hosting to BATS customers since August 2007. "The most important thing is the Proximity hosting service," says the Savvis spokesman. "They want to be as close as possible to other exchanges," says the spokesman. Savvis does all the hosting and takes it away from the company hosting its strategies themselves.
Savvis has owned the London data center since 2004 when it acquired almost all of the assets of Cable & Wireless USA, Inc. and Cable & Wireless Internet Services, Inc. for $155 million in cash. (Cable & Wireless plc filed for Chapter 11 bankruptcy protection in December of 2003 and conducted an auction for its business operations. Savvis submitted the winning bid.)
Savvis currently provides the Proximity Hosting service to five U.S. exchanges, including the American Stock Exchange, the Philadelphia Stock Exchange and BATS ECN. The other two exchanges were not disclosed. In London, Savvis provides hosting to another exchange, which the company declined to identify. Just as Savvis has expanded its New Jersey data center to make room for additional exchanges, the Docklands facility will give Savvis capacity for further growth. Savvis is also looking to expand in Tokyo and Singapore in the next year, according to the spokesman.
Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio