Integration of Market Maker Prices for Exchanges and Brokers
KB TECH has deployed a range of its Market Making tools to deliver the business requirements of Exchanges that are looking to provide easy access to their markets for relevant organisations (e.g. Market Makers) that would increase liquidity and trading volume. Having identified such liquidity provider type organisations Exchanges are often faced with that organisation, whilst willing to provide its prices, is unwilling to make any changes to their internal systems or deploy resource on interfacing to the Exchanges’ trading platform.
In addition to being both easy and fast to deploy the Exchange’s requirements on KB TECH’s pricing integration solution included:
· Flexibility to cater for different source systems
· Low latency
· Limit Exposure
A specific example involved a member of the Exchange acting as Fuel Oil Market Maker whose internal pricing system was based on a spread sheet system with live updates across some 150 instruments, both outrights and spreads, updating every second.
Another example was an exchange member operating as a Market Maker in Iron Ore with an in-house platform built on Microsoft .NET. To meet the Exchange’s launch targets KB TECH provided a separate “DMZ” area of the TDI bus with a “Smart-Router” service enabling the Market Maker to communicate with the TDI bus.
KB TECHs Market Making tools injected these prices into the Exchanges trading platform with minimal latency together with check and control mechanisms for the Market Maker and Exchange. This was undertaken with zero development overhead or operational duplication for the Market Maker thus positively influencing its willingness to provide liquidity to the Exchange.
Integration of a Clients data with the Deutsche Borse CEF Market Data Service
In order to achieve global distribution of its data this Exchange client required its real-time data to be integrated with the Deutsche Borse (DB) CEF market data service.
The project involved interfacing the clients FIX API with the CEF service together with splitting the data into business channels (asset classes) as required by the Exchange. Depending on the data class real-time, delayed and snapshot delivery of data was required.
Where required, changes were made to the client’s data format and delivery processes in order to efficiently interface to CEF.
Full project management was undertaken by KB TECH including the technical and operational liaison with the CEF technical team.
The solution, based on elements of KB TECH’s TDI platform, was delivered within schedule and on budget with zero impact on the clients systems.
Complete Data Distribution Infrastructure for a Regulated Exchange
The Exchange required a cost effective, well-proven and easily deployable price distribution and administration system to fulfil its obligations as a regulated exchange together with delivering its business development requirements for maximising price transparency and data income objectives.
Other business drivers included:
Controlled distribution of data collected from various sources.
· Supply of real-time and end-of-day data for both regulatory, marketing and commercial purposes.
· Client system integration.
· Ease of access with minimum end-user deployment requirements.
The KB TECH TDI platform was an ideal match for the Exchange’s needs. Previous data distribution related TDI deployments and users include The London Metal Exchange, Chicago Mercantile Exchange, Chicago Board of Trade (expanded to include Minneapolis Grain Exchange, Kansas City Board of Trade, The Winnipeg Commodity Exchange and Dow Jones Indices) and Commodity Market Services (a Financial and Commodity Futures Data Vendor). Therefore the platform had extensive experience and was well proven in this market place. Of equal importance was KB TECH’s resource of experienced staff in this area thus ensuring the Exchange’s business requirements were understood and efficiently implemented together with being able to supply relevant project management in the system deployment.
The KB TECH data distribution services utilised included:
· Range of protocols (FIX, xml etc.) for delivery of the exchanges real-time data to the data vendor community (e.g. Thomson Reuters) etc.
· Administrative control tools for producing a range of data sets with individual permissioning functions.
· Interfaces to a range of data sources including the client’s own trading engine, external sources of data
· Real time and delayed data.
· Client branded mobile phone data application for use by exchange staff, members of the exchange etc.
· KB TECH’s PriceView Web and browser based pricing and analytical tools and member services.
· KB TECH’s .NET SDK incorporated in a Windows plug-in for real-time streaming of prices into an Excel spread sheet.
· Real-time data basing and storage of data.
· Back up and automatic failover processes.
Outsourced IT Dept.
KB TECH provided a regulated Exchange, with an outsourced IT department for the development and support of all aspects of the Exchanges technical infrastructure apart from the core-trading engine.
In addition to the supply of resource for acting CTO, various development roles and project management services, this also included the supply of a range of KB TECH’s products on a licensed basis.
The client benefited from an off balance sheet cost effective service whilst at the same time presenting certain KB TECH staff as their own dedicated resource.
Governance of the outsourcing was via a detailed Service Level Agreement ensuring delivery and quality levels were maintained at all times.
KB TECH’s extensive experience, both in terms of its products and staff, within the financial markets, enabled this outsourcing to be set up very quickly and efficiently for the client.
In addition to the day to day IT and management roles provided, the outsourcing included analysis of new business driven technical developments both for the Exchange and its members. Extensive project management resource was provided for a range of projects including migration from legacy systems and liaison with third party suppliers to the Exchange.