Exclusive Online Only ContentItalian Exchange Will Offer Hosted Apama Technology
November 24, 2008
As competition heats up in the European equities market, Borsa Italiana’s technology arm has signed an agreement with the Apama division of Progress Software Corp. to provide its customers with smart-order routing and algorithmic trading capabilities.
Under the deal, the BIT Systems subsidiary of Borsa Italiana--acquired last year by the London Stock Exchange (LSE)--will offer Bedford, Mass.-based Apama’s complex event processing technology on its hosted platform. Clients will be able to use out-of-the-box algorithms, or build new ones, that take advantage of low-latency connectivity to the Italian exchange and other global venues.
“Our agreement with Progress Apama represents an opportunity to widen our services for the trading community we serve, which includes 35 major banks and all of the major exchanges in Europe--Deutsche Borse, the London Stock Exchange and the Spanish markets,” explained BIT Systems CEO Andrea Giochetta. “We constantly look for new ways to minimize complexity and cost for our customers and this deal is an example of that effort.”
According to Giochetta, integration of the new service is under way and will be available by the end of the month. In addition to the European exchanges, BIT Systems, though its data centers in London, Frankfurt, Milan and Rome, provides its trading customers with links to the Chicago Mercantile Exchange; pan-European trading platform Chi-X; e-MID, a Milan-based venue for interbank deposits and overnight indexed swaps; and Italian multilateral trading facilities Hi-MTF and TLX.
In an effort to diversify and cost-effectively provide new technologies, exchanges are increasingly introducing hosted services, noted John Bates, general manager of Apama. “Hosting is definitely the latest thing,” he said, adding that proprietary trading desks are inquiring about hosted access to algorithms as a way to save on trading costs.
In June, NYSE Euronext’s commercial technology unit introduced a hosted platform that gives firms on its Secure Financial Transaction Infrastructure network access to the offerings of third-party vendors. The Progress Apama CEP engine was one of the initial products offered, along with solutions from UNX, a provider of technology and agency brokerage services. In April, Progress announced a deal with ING Wholesale Banking to provide hosted access to algorithms and direct access to exchanges in Eastern Europe.
Bates acknowledged that algorithmic trading volumes on the Italian exchange are far lower than those of the New York Stock Exchange or LSE, but “as people begin to look for more and more opportunities in untapped markets, different geographies and asset classes, algo execution activity will pick up.”
Adam Honoré, senior analyst at Boston-based Aite Group, called the agreement “mutually beneficial.” Borsa Italiana and BIT Systems will be providing a cutting-edge service that could help them win new trading customers, said Honoré. And by licensing its software to another market center, Progress Apama will gain greater exposure. “I see Progress replicating this sort of deal with exchanges across Europe and in other parts of the globe,” he said. “The more market penetration they can achieve in this manner, the greater the value of their CEP product at any one exchange.”
