New York Stock Exchange Hires Consultant To Plot Market Data Delivery Strategy

The New York Stock Exchange is embarking on a major study to plan the course of its market data distribution strategy through the 1990s. Among the issues the study will address are how to cope with ever-increasing bandwidths and a rapidly-growing and heterogeneous array of vendors.

The Big Board has contracted with Hightstown, NJ-based PA Consulting Group to conduct the study, which is restricted in scope to the communications link between SIAC's market data processors and vendor hosts, says Tom Haley, vice president, market data services, at the NYSE. The British-owned PA has some experience in exchange technology, having recently designed a hand-held radio terminal for the options floor at the Amex.

The study is necessitated, Haley says, because the NYSE has no long-term strategy for managing market data delivery. NYSE and Amex market data is currently delivered on three 9600 bits/second lines, two for quotes and one for trades. The NYSE's holy grail -- the benchmark one billion share day -- could demand as many as seven lines, two for trades and four or five for quotes.

The NYSE recognizes that incremental addition of 9600 bits/ second lines to meet incremental increases in volume does not constitute a "strategy." Not only does it place development burdens on vendors, but it also clutters up SIAC's cramped data center at 55 Water Street with rack upon rack of vendor modems. Whether SIAC should consolidate everything into a single 56 kilobits/second pipeline is one issue PA will study, says Haley.

Another issue is whether SIAC should get into the data delivery business, by satellite or otherwise. As it stands, vendors are responsible for picking up market data feeds at SIAC -- "F.O.B. our loading dock," says Haley. The result is a roomful of modems which, at downtown rents, may not be the most cost-effective use of space.

If data were delivered "F.O.B. the vendor's loading dock," it might also allow SIAC to spool out the information to conform with each vendor's processing capabilities. This would eliminate the "weakest link syndrome" in which all vendors must conform before SIAC can implement an upgrade.

Haley won't discuss cases, but it's known, for example, that OPRA has been unable to switch completely to dual-line delivery from its single line because the Associated Press hasn't yet upgraded its system to handle the twin feeds. As a result, OPRA continues to support parallel systems.