Exclusive Online Only ContentReadying for Exchange Status, Direct Edge Taps Equinix
January 27, 2009
Direct Edge has agreed to use Equinix’s NY4 facility in Secaucus, N.J. as the primary data center for its next-generation trading system, scheduled to launch in the fourth quarter, pending regulatory approval of its two exchange applications.
On a Jan. 27 conference call, Steve Bonnano, CTO of the Jersey City, N.J.-based electronic communications network (ECN), explained that Direct Edge’s biggest concern had been finding “a mission-critical infrastructure that basically would support our new exchange platforms.” The company is in the process of filing with the Securities and Exchange Commission for exchange licenses for its EDGA and EDGX platforms.
After looking at other data center providers, Direct Edge selected Equinix because the “Secaucus facility and the Equinix company itself came through as top-notch,” according to Bonnano. Foster City, Calif.-based Equinix and Direct Edge announced a five-year deal Jan. 16. “We felt their presence in the marketplace … and their access to over 300 networks globally made it an easy choice,” he added. “The security of the facility, the reliability of the facility, all shine through.”
Direct Edge says that its three trading platforms--it also operates the ISE Stock Exchange--will be unaffected by the data center migration and it will not charge any fees in connection with the move. Its order book feed will also remain free. For the time being, users who have connectivity to EDGA and EDGX or ISE Stock Exchange’s two data centers will remain linked to those platforms, said Bonnano.
When the EDGA and EDGX exchanges are ready to launch, he added, Direct Edge plans to simultaneously retire ISE Stock Exchange and the current EDGA and EDGX ECNs. “These platforms will remain up through the launch of the two new exchange platforms,” he said. “Once we’ve migrated the entire symbol range over to the new exchange platforms, those facilities as well as those systems will sunset.”
The announcement comes about two months after International Securities Exchange’s equities market became a subsidiary of Direct Edge. Under the agreement, ISE, which operates an electronic options market and is a subsidiary of Eurex, co-owned by Deutsche Borse and SIX Swiss Exchange, took a 31.54 percent stake in Direct Edge. The ECN is owned by a consortium that includes Knight Capital Group, Citadel Derivatives Group, Goldman Sachs and JP Morgan Chase & Co. While Direct Edge works to secure SEC approval, it is using ISE Stock Exchange for trade-through protection and to display quotes.
According to Direct Edge’s preliminary timetable, user testing will begin in the second quarter; development of the new trading platforms is expected to be finished by the third quarter. Users will need to determine whether they need additional connectivity or collocation services, says the company, adding that firms can reserve rack space and ordering lines at the data facility prior to the testing phase.
