ASX Preps New Equities, Derivatives Feeds

In February, ASX announced that it would unify its equities and derivatives systems onto Swedish exchange trading platform and market technology provider Cinnober’s TradExpress trading system to provide customers with a common platform.

At the same time, the exchange plans to consolidate all of its market data feeds onto the same API to facilitate cost-efficient operations and faster time-to-market for new products and services.

Since its merger with the Sydney Futures Exchange (SFE) in 2006, ASX has operated two different trading platforms: ASX Trade for equities trading, based on Nasdaq OMX’s Genium Inet system; and ASX Trade24 for derivatives trading, which is based on legacy SFE technology.

The exchange offers two sets of market data feeds for its equities and derivatives data, which require users to write to separate APIs. For derivatives market data, ASX currently supports an ITCH-like feed used by market data vendors, and a feed for trading members based on the industry standard FIX 4.0 protocol, which have evolved over the life of the platform, says Frank Hoer, market data manager at the exchange. Meanwhile, equities data is distributed over Nasdaq’s proprietary OMnet protocol.

“Many years ago, the ITCH feed was the standard form used by derivatives exchanges around the world, but we are one of the only exchanges using it today. Similarly, the FIX 4.0 feed actually predates FIX supporting derivatives… When the product was first rolled out, we looked at FIX, and we thought it was a good idea, but we had to invent some custom tags, so it’s not in an industry standard format,” Hoer says.

Once the new trading platform is rolled out in 12 months, ASX plans to offer a binary ITCH-like datafeed for both its derivatives and equities markets, which Hoer says will be very similar to its current product. The exchange will also offer a FIX 5.0 datafeed to cater to customers who are familiar with the industry standard, to “make it easy for them to do business with us,” he adds.

The exchange has yet to specify all the requirements for new datafeeds, but the ITCH feed will be faster than the FIX feed and therefore more appealing to latency sensitive trading firms.

“If you are a futures trader in Chicago, you can now get away from writing a bespoke API to talk to ASX. We are going to be offering the exact same two APIs for our equities and derivatives markets,” which will reduce time to market and total cost of ownership, Hoer says.

ASX decided to migrate from Nasdaq’s Genium Inet system to Cinnober for a “host” of reasons, but primarily because the former did not support 24 hour trading.

“The derivatives platform is long due for replacement—that’s how it all started—but we think it’s an opportune time to merge onto a single platform,” Hoer says. ASX will migrate its derivatives market data feeds and matching engine to TradExpress over the next 12 months, followed by its equities feeds and matching engine six months later.