Technical User Group Friday 24 May 2013

Technical User Group Friday 24 May 2013 1 Agenda • Introduction • London Stock Exchange – Millennium Exchange Enhancements Update • London Stock E...
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Technical User Group Friday 24 May 2013

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Agenda

• Introduction • London Stock Exchange – Millennium Exchange Enhancements Update • London Stock Exchange Group - Group Ticker Plant Update • London Stock Exchange - High Growth Segment Update • London Stock Exchange Group - Annual Certification Test Programme • Millennium IT - Trends in Trading Technologies • Q & A Session

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Millennium Exchange Enhancements Update Paul Kennedy Technical Account Manager Client Technology Services - UK

Millennium Exchange Enhancements Update Exchange Enhancements Reminder •

Iceberg order enhancements: - Introduction of public order ID ‐ Optional randomisation of peak size



Optional self-execution prevention



Visible or hidden indicator on passive order Execution Reports



Operational enhancements include the convergence of code sets across LSEG markets for greater operational efficiency and improved release management



Customer impact: ‐ Message length of the Execution Report will increase to support Public Order ID ‐ Type of Trade Field being added to Execution Report to indicate whether the executed portion of a passive order is visible or hidden ‐ New FIX tags being sent in Execution Report messages

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Millennium Exchange Enhancements Update Certification Policy •

Mandatory for all customers to re-certify both Native and FIX protocol based applications

Legacy CDS •

Environment is now available on request to facilitate customer testing

Project Update •

Some functionalities are yet to be deployed on CDS. It is intended to provide the full set of functionalities on CDS in June



As such, as we intend to provide 3 months for customers to test, go-live is now scheduled for end Q3 / early Q4



Certification available from June

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Millennium Exchange Enhancements Update Updated High Level Timeline This Quarter •

London Stock Exchange customer documentation to be further updated - June



London Stock Exchange CDS environment to be available with the new enhancements - June



Customer certification - June

Q3/Q4 2013 •

In July of this year Borsa Italiana will go live with the new release subject to internal QA testing and customer readiness



Two customer dress rehearsals for London Stock Exchange will take place after the August bank holiday



Turquoise Exchange CDS environment is expected to be deployed in Q3



London Stock Exchange go-live is now expected to be end Q3 / early Q4

Q4 2013 •

Turquoise Exchange go-live with the new release

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Group Ticker Plant Project Update Technical User Group - London Philippe Teillet Technical Account Manager Client Technology Services - UK

Real-Time Data Updates FIX-FAST Decommissioning • The Group’s FIX-FAST real-time information protocol will no longer be available from 1 July 2013. Regulatory News Service (RNS) is not affected. •

Customers reliant on the FIX-FAST functionality should migrate off FIX-FAST ahead of this date. As a reminder, the Phase 1 Group Ticker Plant services have been available in our Customer Development Service (CDS) since June 2012 and on Production since December 2012.

FTSE Low Latency • The FTSE Low Latency product has now been deployed to the Production GTP instance and is currently subject to final testing. The Group anticipates making this product available to customers shortly; this will be communicated to the Group Ticker Plant mailing list as soon as we are ready to do so. •

Customers interested in receiving FTSE Low Latency are encouraged to liaise with FTSE to complete contractual and commercial obligations.

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Group Ticker Plant in Milan •

As previously communicated, the Group is conscious that current bandwidth requirements for Phase 1 are not comparable with connectivity package capacities currently in use for Borsa Italiana customers.



The Group is investigating a Group Ticker Plant control mechanism which will manage the flow of real-time information to consumers with connectivity services of 20Mb capacity.



The details of these services remain to be defined, but it is anticipated to be a TCP solution, leveraging the existing message libraries as published – adding additional messages to manage the TCP sessions.



This control mechanism is not anticipated to be applied to the London instance of the Group Ticker Plant, this includes the Italian data sets available on the London instance.

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Group Ticker Plant Phase 2 The Group Ticker Plant Phase 2 services will include a real-time incremental service for London Stock Exchange, Borsa Italiana, Turquoise Cash, Turquoise Derivatives markets. The scope of the MTS product remains to be defined.

Timeline The timeline of Group Ticker Plant Phase 2 services remains as advertised; go-live is achievable in H2 2013. Go-live of Group Ticker Plant Phase 2 services will take place after the successful deployment of Release 8 to Production. CDS and updated documentation will be made available as soon as possible. Bandwidth The Group will take delivery of the first Phase 2 codeset shortly and can begin bandwidth modeling. The Group is conscious that should testing indicate an upgrade of circuit capacities, adequate time for this uplift should be provisioned before any go-live of Phase 2 services. Performance The performance of the Phase 2 services is anticipated to be significantly improved versus that of any Production real-time information service currently available. The performance statistics are anticipated to be published as soon as they are available. 10

Further Information •

For further information clients should contact their usual Group Contact.



Technical Enquiries can be forwarded to the Client Technology Group (UK):

Telephone: (+44) 207 797 3939 Email: [email protected]

Media Enquiries can be forwarded to:

Telephone: (+44) 207 797 1222 Email: [email protected]

Project microsite provides further information and mailing list registration:

www.londonstockexchangegroup.com/oneproductinfinitepossibilities

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High Growth Segment Update Philippe Teillet Technical Account Manager Client Technology Services - UK

High Growth Segment •

The Exchange introduced a new segment to the Main Market that caters specifically for high growth, UK and European businesses, that require access to further capital and a public platform to continue their growth



Consultation on rulebook changes closed on Friday 8 March 2013



Trading information in relation to the High Growth Segment





High Growth Segment securities will be traded on either the SETS or SETSqx trading services using the current selection criteria



Whilst in time, as the market grows, new dedicated segments may be created, initially it is intended that existing segments will be utilised



Member Firms will be notified in due course and provided adequate opportunity to develop the new segments prior to their adoption



In the meantime there is no specific development work required to trade securities admitted to the High Growth Segment

Business questions about the High Growth Segment can be sent to: [email protected]

Annual Certification Test Programme Don Mucha Manager, Technical Account Management and Market Access Client Technology Services - UK

Annual Certification Test Programme What is the new annual certification test programme? • It’s a new programme to ensure that all clients perform at least two certification tests per software application in any 12 month period, with a minimum of 6 months between each test.

Why are we introducing it? • There is an increased focus on LSEG from regulators who want to ensure that members and participants systems used to access the venues have a minimum level of functionality that is compatible with fair and orderly trading. How is it different from what we already do? • The current policy is that customers are required to do a certification test only when they have made a code change to their software. Some clients have not tested their software since the launch of Millennium as they do not use the additional functionality that we have introduced. Why now? • As well as the regulatory drivers, we are already revising the test policy to support greater testing interoperability across the 3 eligible LSEG venues. It makes sense to introduce both sets of changes at the same time. 15

Annual Certification Test Programme

Certification Policy • • •





Customers and ISV’s are required to certify their developed in-house software twice per year per venue. Software certification remains valid for twelve months from the date of the second certification test. At least one Certification Test will be LSEG-Led (i.e. mandatory release). The other required test will be Client Led. If the number of LSEG mandatory tests is greater than one, there will be no obligation to perform a Client-Led test. In both LSEG and Client-Led tests a customer will need to perform either a Full Certification Test or a Self Certification Checklist. A Full Certification Test is completed with support from LSEG. A Self Certification Checklist is a full certification test which is completed by the customer without support from LSEG. Full details can be found in the testing guides for the relevant venues.

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Annual Certification Test Programme

Certification Passport • • •

With the introduction of the Millennium Functional Release, London Stock Exchange, Borsa Italiana and Turquoise Equities Markets will be on the same codeset. For the Turquoise and Borsa Italiana Derivatives markets, the markets are already on the same codeset. Customers that have successfully completed the full certification process on an eligible LSEG venue are allowed to connect their software to any other eligible LSEG venues, under the following conditions: –

The software name and version are the same on each venue



The functionality that will be used was tested as part of the Full Certification test



The customer completes and returns a self certification checklist for each additional venue

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Annual Certification Test Programme

Re-certification Policy •

Customers are required to re-certify their applications under the following conditions: –

The customer modifies the software in any way that directly impacts LSEG interfaces. This includes but is not limited to updates to Gateways, Order Management, Execution Management and Quote Management Software.



The Exchange upgrades its production environment to a later version of software where there is client facing functional changes.



The software certification period has expired.



The customer is requested to re-certify their application by the relevant venue.

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Contacts •

Client Technology Services - UK –

Technical Account Management • [email protected] • +44 20 7797 3939

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Trends in Trading Technologies – Millennium IT Anthony Cole Head of Sales & Marketing Millennium IT

Millennium Overview About MillenniumIT

• Founded in 1996 in Sri Lanka • 700 staff in Colombo and on Malabe campus • Two business lines: • Capital market software products • Enterprise service & systems integration • Acquired by London Stock Exchange Group in 2009 16 Acre Campus

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Millennium Overview Company Positioning

• Leaders in high performance, ultra-low latency technology to power capitalmarkets

• Serious about innovation, big commitment to R&D • Market leading, versatile, flexible and reliable product range • Faster time to market, through layered, modular architecture allowing business • •

rules to be modified without change to the underlying software Greater reliability from distributed fault tolerance A robust, global support operation: Once you go live, you stay live

• Specialists in capital market solutions

• Over 30 capital market clients - exchanges, inter-dealer brokers, banks and CSD’s • Markets that run on Millennium platforms include London Stock Exchange, London Metal Exchange, Borsa Italiana, Oslo Børs and Johannesburg Stock Exchange

Helping you think about your business differently 22

Millennium Overview The MillenniumIT Advantage

Helping you think about your business differently.

The fastest trading platform in the world 55us

Innovative surveillance

High availability across data centres 6 markets live within two years

Flexible innovation of products & services through BID New gateways to support orderly trading

New post trade system to facilitate STP for efficiency Providing a truly multi asset class/ market system

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Millennium Overview Comprehensive Capital Market Product Suite

Millennium Product Suite

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Millennium Overview Product Deployment

Customer Solution Pre Built

Equity

Equity Derivatives

Fixed Income

Commodity

Platform

Currency

Product

Technology

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Millennium Overview Technology Summary

• • • • •

Performance Reliability Flexibility Scalability Cost

OS Tuning Real-time Priority CPU Affinity Polling Programmable Components Event Driven Rule Engines Dynamic Data Definitions Distributed & Parallel Processing Processing Pipelines Partitioning

Loose Coupling Self-Describing Messages Location Transparency Message Based Testing

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Hardware Acceleration Infiniband (RDMA) FPGA & GPUs Software FaultTolerance 4-Way Active Mirroring N+1 Redundancy Thin Client GUIs Spatial Subscription

Layered Architecture Platforms & Products Solutions 26

Trends in Trading Technologies Market Trends

• Huge cost pressures on venues and market participants • Market fragmentation, economic uncertainty, increased competition, political pressure and new regulation means change • Widespread concern about market integrity and investor safety

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Trends in Trading Technologies Further Attacking Cost of Ownership

• Reduction in hardware footprint from better use of resources: • Use of InfiniBand multicast removes need for dedicated network

• • •



communication threads • Configurable/dynamic thread model rather than fixed thread model • More use of specialist hardware graphics technology Further significant reductions in hardware footprint possible with other optimisations Less reliance on expensive third party technologies New dynamic throttling techniques will allow more efficient allocation of hardware resources More effective and efficient testing. Millennium have developed a new AI machine-learning approach to test script generation.

MillenniumIT: The capital market specialists. 28

Trends in Trading Technologies Improving the Service and Improving Business Agility

• Dynamic throttling, based on core system latency and queue lengths, will allow more trading capacity bandwidth for those who need it, when they need it • Sophisticated techniques to reduce latency and jitter: • Dynamic load balancing: Allow instruments to switch between physical threads so matching engine can better manage dynamic load conditions • Dynamic re-ordering: Allow the system to re-order transactions (without breaking instrument time priority) to optimize load handling • Millennium’s BID (Business Innovation Dynamically) technology: Business rules on top of the application architecture. Next generation will be even more self-configurable (declarative programming) • Increased use of hardware acceleration (in gateways and peripheral processes) to improve latency and cost/benefit equation

MillenniumIT: The capital market specialists. 29

Trends in Trading Technologies Market Integrity and Investor Safety

• Enhancements to the trading gateway will allow mitigation of risk from rogue algos and from system instability: • Static: Gateway looks for known patterns, but can’t cope with unknown • Dynamic/Heuristic: Trading profiles created from analysis of past data using sophisticated machine-learning techniques • Runaway algos can create serious transient loads that can bring down systems. Dynamic throttling, based on core system latency and queue lengths, will allow full capacity to be assigned without compromising stability • New Millennium ultra-low latency post-trade technology will allow pretrade assessment of counter-party and currency risk • New approaches to market surveillance based on advanced analytics

MillenniumIT: The capital market specialists. 30

Trends in Trading Technologies Ultra Low Latency: The Journey Continues

• Millennium is famous for low latency, high availability, fault tolerant, flexible technology. We plan to go further: • Systems that can run themselves 24x7 • Significantly reduced hardware foot-print • Scalability: from 1000 ops to 1M ops with billions of orders/day • Even lower latency

• Why do we need this performance? • Enhanced Service: Allows complex strategies to be executed fast and efficiently across multiple matching engines threads and processes • Safer Markets: We gain extra time for enhanced gateway protection measures • Everyone Benefits: Novel designs and extreme efficiency benefit all participants with improved cost-benefit equation and safer markets

MillenniumIT: The capital market specialists. 31

Millennium Overview Why Millennium?

Faster Time to Market Rich functionality Configurable (BID) High performance (55us) Industry standard connectivity

Lowering Cost of Ownership Small hardware footprint Cost effective scalability Lowering operational cost

Future Proof Multi asset-class, multi market Scalable Flexible High Performance

Lowering the Risk High resilience Fault tolerant Leading edge surveillance Focus on risk mgt & market integrity

Strong Domain Partner Industry proven technology (over 30 clients) Integrated products to cover the lifecycle 32

Thank you For more information please contact: Anthony Cole [email protected]

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Q & A Session

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