STRATEGIC POSITIONING - JSE MAGAZINE

STRATEGIC POSITIONING

The JSE’s state-of-the-art data centre enables clients to trade in a stable and secure environment at optimum speeds

STRATEGIC POSITIONING

With all the talk about Africa’s data centre boom, it’s a point of pride that the JSE has its own – and that it houses a purpose-built –   colocation facility. ‘Unlike other local data centres that are significantly larger and service a wider range of clients, our colocation facility is much smaller and built with the sole purpose of assisting our trading community,’ says Merlin Rajah, Business Development and Technical Account Manager at the JSE. ‘In May 2014, we built out 35 hosting units, and we have the ability to build a further 35 should the need arise. Our niche allows us to focus on providing the market with a first-class trading venue coupled with a robust trading engine and solid, secure and latency-sensitive connectivity method.’

A colocation (or colo) facility is a data centre in which businesses rent space for servers so they can colocate very close to the trading engine. The JSE’s centre is custom-built to provide trading firms with fast access to the trading engine, at a very cost-effective price point. ‘Clients can take up a 3 kVA rack, a patch panel with primary and secondary ports facilitated by 10G fibre cross-connects for less than R30 000 per month,’ says Rajah. And even if you don’t understand the specs, you will appreciate the connection speeds.

‘We measure the network round-trip latency at sub-100 microseconds,’ he says. ‘This measures the time the order is submitted from the switch to the trading engine, and also the time it takes to receive the acknowledgement from the trading engine back to the switch in the client’s rack. To put this into perspective, a microsecond is one-millionth of a second. One second is 1 000 milliseconds, and there are 1 000 microseconds in a millisecond. It takes the average human between 300 and 400 milliseconds to blink.’

Colocation enables clients to implement low-latency strategies that respond to market events in the millisecond environment. ‘We see a number of international proprietary trading companies that have developed highly sophisticated programmes come into our market and increase the activity on our central order book. The speed at which these systems interact is very important, as it creates profit opportunities by enabling a prompt response to news or market activity. All of this assists in creating a liquid market.’

Rajah lists numerous other benefits for clients that take up residence in the JSE’s colo centre, including fully redundant methods of power that include multiple UPS and generators that can power the environment’s services for up to five days without city power; 10G fibre cross-connects throughout the centre; state-of-the-art cooling; multiple levels of security in terms of manned security, biometric scanners and closed circuit cameras; and a very knowledgeable remote-hands service to assist with queries.

‘Previously, a firm’s geographical position played a part in ensuring some type of latency advantage,’ according to Rajah. ‘Firms in Sandton would often have an advantage over firms in Cape Town, which would have an advantage over firms in London, and so on. Colocation has thus become the leveller by providing them all with the fastest access and equal opportunity.’

The JSE’s colocation team takes that notion of fairness very seriously. The facility’s fibre cross-connects are of equal length to all clients and laser-cut to ensure that no-one is at a disadvantage, no matter where they’re placed in the data centre.

‘We have been South Africa’s trading venue for 130 years and our teams are skilled at dealing with unique types of issues that are related to trading,’ says Rajah. ‘Unlike some other data centres, we understand the importance of ensuring we endeavour for 100% uptime and quick resolution of any issues experienced by our clients. If we find that there is an issue, we kick in numerous processes to ensure an optimal resolution.’

By Mark van Dijk
Image: Gallo/GettyImages