Building on their long-standing relationship, Instinet will locate the matching engine of its proprietary BlockMatch® multilateral trading facility (MTF) into Interxion’s London data centre campus. Using BlockMatch®, Instinet’s clients will be able to trade on its matching platform with fair and equal access through Interxion’s cross-connect parity solution. This offers market participants equal connectivity and consistent speed when trading; an important step in preparing for MiFID II.
Under the hosting arrangement, all BlockMatch participants connecting to the trading platform from a proximity hosting location within the Interxion campus will receive equalised cross-connects with a set distance of 250m, eradicating any material latency differences between users. Interxion will also provide Instinet with redundant GPS, Glonass and Galileo time synchronisation signals to enable BlockMatch® to use highly accurate clocks to meet its MiFID II microsecond precision timestamping obligations.
Ben Stephens, head of business development at Instinet Europe, said: “Locating the BlockMatch matching engine at Interxion’s London campus will ensure all participants will have the same advantages, this includes fair equalised access, speed of trading and high precision timestamps. As more trading moves to MTFs and the regulatory framework surrounding trading venues becomes more complex following MiFID II, having key elements of performance and compliance built into our data centre operations is the right thing to do both for us and for our clients.”
MiFID II is poised to become the gold standard for trading and market oversight in financial services, demanding firms make major changes to the way they operate, as well as the technology and connectivity infrastructures they depend upon. Accurate timestamping and systems resilience have to be built into a trading venue’s systems. To meet their new regulatory requirements before January 2018, trading venue operators like Instinet also need to be able to demonstrate equal market access, meaning they must provide the same latency for any client that uses a proximity hosting service or colocation cross-connect to access their matching engines.
Commenting on the new arrangement, Bill Fenick, Interxion’s Strategy and Marketing Director for Financial Services, added: “MiFID II places a clear obligation on institutional clients to demonstrate best execution and on venue operators to ensure that there is no discrimination between participants. Fair and equal market access is essential. As a global leader in equity trading, Instinet’s commitment to not just meeting, but exceeding compliance requirements is exemplary. Working in our data centres, Instinet can give its clients confidence that they’re trading on an even playing field”.
Access to BlockMatch® from Interxion’s London Campus will become available to all participants later in Q4 2017, ahead of the MiFID II implementation on 3 January 2018. BlockMatch® will continue to operate in its current capacity until the move to Interxion.
