There’s a lot going on these days. Industry portal datacenterdynamics.com recently reported that three major stock exchanges plan to relocate their data centers. In the wake of its acquisition of the Borsa Italiana, Euronext reportedly plans to move from England to Italy in the second quarter of 2022. The London Stock Exchange likewise intends to leave the City in 2022 and plans to relocate to London’s Docklands. And the New York Stock Exchange and the Nasdaq Exchange are both considering moving operations out of New Jersey to save taxes.
In this day and age, it no longer appears to matter where stock exchanges operate their data centers and where matching engines are sited and all trade orders are matched. Market participants who, for instance, earn their money through low-latency trading would disagree with this assertion, however. Speed ranks among the crucial factors for their trading success. Low-latency traders usually install their computer systems directly on the premises of a securities exchange’s data center to keep the transmission path of orders as short as possible. So, if they wish to continue using the fastest possible connection, those market participants have no other choice than to tag along on the planned relocations.
Anyone devoting so much effort to securing speed should be consistently giving their business model some forethought. Low latency doesn’t stop at the walls of the data center: microwave, or radio frequency, technology enables information to be transmitted between markets at the speed of light. Information sent via fiber optic cable takes around 13 milliseconds to make a round trip from the Swiss stock exchange to London and back. With microwaves, the same round trip takes only 5.5 milliseconds. Fiber optic cables rarely follow the shortest direct path. As proverbial data highways, they are routed along urban centers and have to cross rivers and detour around mountains. Microwaves, in contrast, make a beeline from point to point like an airplane.
SIX Operates Europe’s Largest Microwave Network
SIX operates the largest microwave network in Europe and the second-biggest one worldwide through its subsidiary 12H, making SIX Swiss Exchange the only regulated stock exchange in Europe that enables all of its trading participants to register price movements and implement investment decisions as fast as the laws of physics allow. The microwave network currently connects Zurich with London, Frankfurt, and Milan, and links Milan with London and Frankfurt. SIX additionally is working together with Nasdaq Nordic to provide a microwave connection between London and Stockholm. SIX intends to further build out its microwave network and to offer other stock exchanges and market participants access to it – wherever their data centers end up relocating.
The Swiss Stock Exchange is the first regulated exchange in Europe to own and operate an international microwave network which enables the fastest transmission of market data between trading centers. Do you need more information on the technical implementation?Learn More
Gregor Braun has been working at SIX for 14 years. The Head Sales Switzerland & Europe is responsible for promoting products and services related to SIX Swiss Exchange. His tasks also include developing innovations together with clients. His focus is on the equities and ETF business. Since SIX acquired a majority stake in 12H, he is also responsible for the microwave network offering.