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New IBM Software Framework Helps Financial Markets Manage Electronic Trading

Enterprise Resource Planning / Financial
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The new framework, an open-standards-based technology platform, combines IBM's industry assets and ultra-low latency features with advanced information management, analytics, and process integration.

At the recent Securities Industry Financial Markets Association's annual Financial Services Technology Expo in New York City, IBM unveiled a new technology platform designed to transform the way that financial services firms manage the ever increasing amount of data and transaction volumes generated by capital markets around the world.

Financial systems are tremendously data-intensive and rely on speed in trading transactions that can result in huge profits and help exchanges compete and meet client demands. As market volatility continues to increase so does the risk of system failures that can lead to transaction delays, with a direct impact on the global financial system and the businesses and individuals that rely on it.

Recognizing these demands, IBM is introducing the new Financial Markets Framework, an open standards based technology platform that combines IBM's industry assets and ultra-low latency features with advanced information management, analytics and process integration software.

According to analyst firm Celent, the global securities and investment software market currently exceeds $14 billion annually,1 and financial services firms are increasingly relying on technology to drive new innovation, streamline operations, improve reliability and meet a growing list of regulatory requirements for transparency, compliance and risk management.

Interactive Data Corporation (NYSE: IDC) a global provider of managed ultra-low latency services for electronic trading and a broad spectrum of market data and related areas, is using the IBM framework to provide a variety of electronic trading infrastructure services to clients.

"Interactive Data's technical infrastructure supports collecting, editing, maintaining and delivering data on millions of trading instruments throughout the day to a wide range of financial institutions and active traders globally," said Jeff Banker, executive vice president, Real-Time Market Data and Trading Solutions for Interactive Data. "Through our partnership with IBM, we will continue to pursue new opportunities to deliver additional managed services that can meet the evolving front, middle and back office needs of our clients."

Interconnected systems deployed on fit for purpose technologies that are tuned for specific workloads enable the most efficient deployment of enterprise solutions – reducing cost and increasing efficiencies by supporting a holistic view into essential operations as they occur across their entire enterprise. The IBM Financial Markets Framework leverages both industry and open standards to simplify integration, improve interoperability and enable the delivery of innovative customer-centric services.

IBM client, Bolsa de Comercio de Santiago, Chile's central stock exchange, has undertaken a multi-year effort to position their exchange for the market environment of the future. The company is utilizing the IBM framework to advance their trading platform to meet regulatory requirements and improve performance.

"In addition to basing our new securities trading platform on IBM offerings, we are using the IBM Financial Markets Framework to guide our entry into trade surveillance and monitoring," said Jose Antonio Martinez, General Manager, Bolsa de Comercio de Santiago. "We are performing specific correlation analysis on trades to watch for regulatory violations."

The IBM Financial Markets Framework provides the key capabilities required by almost every financial markets firm, including:

  • A market data solution that can accept feeds from virtually any provider and deliver market data at high speeds and low latency
  • An algorithmic trading program that can increase automated trading while reducing risks
  • Securities processing capabilities that consolidate similar processes to lower operating costs
  • A next generation trading infrastructure capable of low microsecond response times and millions of orders per second throughput
  • Market surveillance and trade monitoring capabilities that can track and analyze market activity in real time to identify and investigate possible violations of market regulations
  • A settlement risk management capability that can measure and monitor the risk associated with unsettled trades

IBM has teamed up with Fixnetix to combine IBM's Financial Markets Framework with Fixnetix comprehensive co-location and market connectivity capabilities. This offers clients dedicated or shared hosted managed services that provide cost-effective, ultra low latency services for multi-asset market data and trade/order execution.

"The Fixnetix and IBM strategic partnership will enable our firms to provide tiered global services to leading investment banks, hedge funds and proprietary trading groups," said Paul Ellis, COO and Founder, Fixnetix. "This is ideal for clients seeking ultra-performance, service stability, and reduced cost."

IBM has engaged with the world's leading financial services firms on mission-critical projects for almost 100 years. In working with financial markets clients, IBM has developed an unparalleled portfolio of skills, technology assets, trading-specific computing platforms, and business consulting and information technology services, supported by the world's largest industrial research organization. As a result, IBM is uniquely positioned to facilitate a collaborative approach for innovation in the financial services industry.

Chi-Tech, one of the world's leading providers of trading services to exchanges, is utilizing the framework as part of its new trading platform.

"Chi-Tech is continuously monitoring best-in-class trading technologies to meet the needs of our clients. To that end, we've incorporated IBM middleware into our platform, to meet their requirements and our high standards for speed and mission-critical reliability," said Gregory E. Smith, Vice Chairman of Chi-X Global Inc. and CEO of Chi-X Global Technology Inc. "We are continuing the worldwide rollout in our Chi-X Asia and North America exchanges, and we fully support the IBM Financial Markets Framework for the broader industry foundation that it provides to the Chi-Tech customer base around the world."

Today's announcement represents another addition to IBM's leading portfolio of industry solutions and frameworks. Industry frameworks provide a configurable platform to accelerate deployment of business solutions. They extend IBM's service oriented architecture (SOA) middleware with industry-specific capabilities and specially designed process templates. IBM industry solutions and industry business partner solutions build on the value provided by these industry frameworks to deliver a unique, end-to-end solution for each client.

The IBM Financial Markets Framework helps clients build an integrated platform for all of their operations based on industry standards. It combines IBM's entire software portfolio including WebSphere, Lotus and Information Management products and full range of IBM server and storage products, industry-specific offerings and consulting expertise of IBM Global Business Services.

The IBM Financial Markets Framework helps to enable the creation of highly-available and scalable infrastructures that help reduce costs and complexity while achieving breakthrough productivity gains. IBM's latest advances in engineering and software development have produced a Securities Exchange Reference Architecture (SXRA) lab benchmark that achieved over five million orders per second and latency as low as 12 microseconds for the round trip from gateway to matching engine and back using a combination of InfiniBand and 10GbE. The IBM lab performance results show a 70 percent increase in orders per second and 40 percent reduction in latency over IBM results published one year ago. The environment featuring Low Latency Messaging was recreated and on display at the show.2

For more information on the IBM Financial Markets Framework or for details on how IBM is helping financial services clients and Business Partners to make smarter, faster decisions, visit: www.ibm.com/financialmarkets.

______________________

1 Celent: "IT Spending in Financial Services: A Global Perspective," January 2010

2 The environment included: IBM WebSphere MQ Low Latency Messaging, IBM solidDB, IBM Power 750 Express, IBM BladeCenter HS22, IBM Enterprise X-Architecture System x3850 X5, and IBM XIV Storage System.

IBM is a leading global hybrid cloud and AI, and business services provider, helping clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM's hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently, and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM's legendary commitment to trust, transparency, responsibility, inclusivity, and service.

For more information, visit: www.ibm.com.

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