GTX plans to launch new a matching engine for its flagship ECN in London October 15, 2106, with a Tokyo-based matching engine to follow within 90 days.
The new matching engines, along with GTX’s existing matching engine in New Jersey, will be accessible by clients connected to any of the three locations. The clients can then choose whether to interact only with local liquidity or to access the global order book.
“This move has been driven by client demand, we had a lot of clients – particularly the more latency-sensitive clients – reach out and say that it would be more efficient for them to access liquidity locally. That’s why this is designed so that we can segregate the matching engines, so if a client opts out of our global order book we can direct them to the nearest site where we have a matching engine,” says Steve Reilly, managing director, head of liquidity at GTX.
Meanwhile, firms that are less latency sensitive might opt to use the new global order book structure, which GTX CEO, Vincent Sangiovanni, says will help satisfy best execution mandates for asset managers and other market participants subject to them.
“These launches will enable us to better serve our growing, global clientele, but also do so through a single global order book, which is ideal for the vast majority of our asset manager and bank buy-side clients as well as our bank and non-bank liquidity providers,” he says.
GTX says that its active monitoring of trade matched and execution quality is a differentiating factor with the launch of these two matching engines, as it enables them to consolidate pricing from the regional matching engines into a consolidated order book, thereby offering improved price discovery at the deepest liquidity pool that GTX can provide.
GTX’s current matching engine is housed in Equinix’s NY4 data center. The new matching engines are housed in the company’s LD4 and TY3 data centers respectively. Profit & Loss understands that the LD4 matching engine will launch with more than 10 liquidity providers, who Reilly says have been supportive of the move.
“The biggest lift for us in launching these matching engines was on the technology side, making sure that we had the best and most efficient hardware available and working on the software development. But we’re on schedule for the LD4 launch and the liquidity providers have been very helpful in supporting us, because this was really a move driven by client demand,” he says.