Colt to Expand Korean Co-Lo Footprint

The datacenter building is owned by Koscom, a subsidiary of the Korean Exchange (KRX). In March 2012, Japanese IT and datacenter services provider KVH─which Colt acquired in 2014 (IMD, Nov. 12, 2014)─partnered with Koscom and the Korea Ministry of Finance, allowing the vendor to provide proximity hosting services at the Busan facility.

Sooyoung Sung, Colt's Seoul-based Korea business head, says this represents the third co-location expansion since KVH began construction of its presence in the Busan facility in 2012. KVH completed construction in 2014.

The latest expansion will provide 30 percent more broker-neutral co-location space at the Busan facility. In February 2016, KRX launched derivatives data distribution directly from Busan, which has resulted in more international high frequency trading firms setting up their trading infrastructure at Colt's facility there, which Sung says is the main reason for the expansion.

The datacenter is in close proximity to KRXʼs derivative market matching engine, giving latency-sensitive traders an alternative way to access its trading system.

"The expansion is more particularly for international high-frequency trading clients that want to improve their ability to trade in Korean derivatives," Sung says, adding that since both KRX and Koscom are now fully privately held, they have been very keen to grow their international business.

Separately, Sung says Colt is already in talks with an unnamed "key anchor client" to deploy its financial extranet service in Korea within the next year, following a recently announced multi-year partnership with Koscom to deliver ultra-low-latency connectivity between capital market participants in Korea and the world's major stock and derivatives exchanges. The partnership with Koscom also enables Colt to further develop integrated financial IT and market data solutions for Korean capital markets, such as its Prizmnet financial extranet.

Colt rolled out Prizmnet in Japan, Hong Kong and Singapore beginning of this year, and is looking to add Sydney, Australia to its list of Asia-Pacific locations in the near future.