Burgundy, the Nordic multilateral trading facility (MTF) backed by 14 of the region’s leading banks and brokers, is moving its matching engines to Interxion’s financial hub in Stockholm, with go live due in the first quarter of 2011.
The MTF started trading Nordic equities in June 2009, supported by two data centres in Stockholm selected by Cinnober, the supplier of the MTF’s trading platform. At that stage, few algo and high frequency traders operated in Stockholm, making latency less of an issue than it is today and proximity services, such as those offered by Interxion at a data centre 16km away from the MTF’s matching engines (see the wire item from last year here), acceptable.
Since then, the interest of more algo and high frequency traders in Stockholm has increased fragmentation and competition in the Nordic markets, acting as a catalyst for Burgundy to move its matching engines into a co-location centre. Olof Neiglick, CEO at Burgundy, explains: “Co-location services are a key element in our offer. A significant proportion of Nordic trading is currently conducted outside the region. As a result, there is a clear need for low latency access. Interxion has the location, infrastructure, connectivity and expertise to provide a turnkey solution to our customers.”
The addition of Burgundy is a fillip for Interxion, which has hosted the Nordic Growth Market matching engines at its Stockholm data centre since May. The third exchange in Stockholm, Nasdaq OMX Nordics, has co-located its Inet matching engines at a Verizon data centre in the city.
Kevin Dean, chief marketing officer at Interxion, says: “Trading opportunities are emerging in the Nordic markets following the increasing fragmentation of the markets. This is fuelling increasing demand for co-location and proximity hosting services around the Nordic liquidity venues in order to reduce latency. Banks’ statistical arbitrage desks and high frequency traders are locating their trading platforms in Stockholm as the Nordic markets are becoming more competitive. In response, liquidity venues are selecting sophisticated data centres allowing market participants to co-locate in close proximity to the venues’ matching engines.”