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Turquoise Taps Corvil for Latency Testing
October 14, 2008
The Turquoise multilateral trading facility (MTF) said today that it is deploying a latency management system from Corvil, the latest in a series of moves by European market centers to attract customers with state-of-the-art services.
The CorvilNet platform lets Turquoise “monitor our latency performance in a very proactive way,” said Yann L’Huillier, CTO of the London-based venue. “It allows us to assess network throughput, identify microburst activity and latency impact in a non-intrusive manner, and that certainly will help us in serving our customers.” Those capabilities are critical in a competitive market, he said.
Added Donal Byrne, CEO and founder of Corvil in Dublin, “It has become increasingly necessary for exchanges to use such testing tools because latency has become a key performance indicator for why traders may or may not choose to trade at a particular exchange.” Corvil clients include Credit Suisse, Deutsche Bank and the London Stock Exchange.
Turquoise, owned by BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Merrill Lynch & Co., Morgan Stanley, Société Générale and UBS, became fully operational last month and offers securities in 13 markets. Its pan-European competitors include Instinet-operated Chi-X and Nasdaq OMX Europe, which is in the process of rolling out. BATS Trading plans to introduce a European venue later this month and NYSE Euronext is readying its Octopus MTF and block trading venue SmartPool, which it co-owns with BNP Paribas, JP Morgan Chase & Co. and HSBC.
With CorvilNet, Turquoise customers will be able to see how fast market data is being updated and sent out and how long it may take for trades to be executed, said Byrne. “Traders want to be able to drill down and identify the piece of infrastructure that slowed down a trade or if the cause was a microburst occurrence on the system,” he said. Those without such information are “flying blind,” asserted Byrne.
The service will also let customers of Turquoise, which employs an integrated dark pool and visible order book, specify the latency objectives of their trading and market data infrastructures on a sub-microsecond level and then continuously monitor for compliance against those objectives. If violations occur, the system sends out an alarm, performs a “smart” packet capture for analysis and provides immediate recommendations.
According to Byrne, the deal came out of a conference he attended with Turquoise CEO Eli Lederman last fall, where the two struck up a conversation about latency and how it will become a key differentiator. “We found that we agreed a lot on how latency issues will ultimately impact markets,” Byrne said. Those venues with better performance, he added, will eventually command greater order flow, and those that are transparent about latency will do even better.
The first phase of the CorvilNet installation will be finished by year-end. Work is largely complete, said Byrne, “but there are further projects we are working on for Turquoise that entail providing even more advanced latency analytics.”
“Early in our design process, we decided that market-leading low latency and high throughput would be hallmarks of our platform,” added L’Huillier in a statement. Turquoise uses a trading platform from Cinnober Financial Technology, and BT Radianz, BT Group’s financial extranet operator, provides hosting services and low-latency connectivity for the venue. In January, Turquoise announced that it was implementing a real-time market surveillance system from Progress Software Corp.’s Apama division and technology consultancy Detica.
