JSE unveils co-location centre plans
The Johannesburg Stock Exchange (JSE) is moving ahead with the construction of its co-location centre to be completed in the first half of 2014.
The group says it will be constructed according to best practice Tier III data centre standard and located at the exchange, and will offer clients access to the JSE “at unprecedented speeds”.
Co-location will offer 24 times faster access into the equity market with a latency of 100 microseconds compared to 2,400 microseconds which is the current fastest latency of JSE members located in Sandton.
“To put this speed into perspective, there are one million microseconds in a second and one thousand microseconds in a millisecond,” the group said.
“Clients demand faster execution speeds and exchanges need to offer these in order to compete. Co-location potentially offers huge benefits for our market in terms of volumes and liquidity, which in turn could lead to better price discovery. Our latency compares very favourably with international latencies offered by other exchanges,” said Leanne Parsons, director of the JSE’s Equity Market.
Demand for co-location has come from JSE members, as well as clients, software providers and data vendors both local and international. The major portion of demand comes from firms based in the UK, the JSE said.
It noted that apart from the benefits to the market, co-location opens up a new revenue stream for the group.
The co-location facility will initially provide space, power, cooling, and physical security for 35 racks for clients’ computers. The co-location centre has space for 140 racks.
The JSE launched its Millennium Exchange equity trading platform in July 2012, having moved its platform from London, where the trading engine had been situated for ten years, to the JSE building in Johannesburg.
Facts about trading activity on the JSE’s Equity Market since Millennium Exchange implementation:
- Approximately 65% of the JSE’s trading activity can be attributed to algorithmic trading activity;
- The first year has seen the JSE receive almost 1.5 billion orders (with the highest on one day being 9.3m on 20 June 2013);
- A peak of 1,941 orders per second;
- A peak of almost 1000 trades per second;
- Almost 140,000 average daily trades which compares to 158,000 trades per month in the first year of the JSE’s first electronic trading system (implemented in 1996);
- 2.5 billion market data messages disseminated;
- 35 million trades
Be a trader
In a bid to grow public participation on the JSE, the group has launched an online trading simulator which will allow aspirant traders to test a range of JSE products, in a risk-free environment.
This simulated trading platform, dubbed the JSE Virtual Trader, is hosted on the JSE website. Registered users are able to trade any of the JSE’s suite of products, on a real-time basis.
Utilising virtual cash and a 15 minute delayed price feed, members of the public can now experience the world of trading through investing, hedging and speculating.
Traders can test their investment strategies and track a virtual portfolio created from any the JSE asset classes. The user will have the benefit of experiencing how various products on the exchange are priced, traded, risk-managed and settled on a daily basis, all within a risk-free environment.
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