Integration of Market Maker Prices for Exchanges and Brokers

KB TECH has deployed a range of its Market Making tools to deliver the business requirements of Exchanges that are looking to provide easy access to their markets for relevant organisations (e.g. Market Makers) that would increase liquidity and trading volume.  Having identified such liquidity provider type organisations Exchanges are often faced with that organisation, whilst willing to provide its prices, is unwilling to make any changes to their internal systems or deploy resource on interfacing to the Exchanges’ trading platform.

In addition to being both easy and fast to deploy the Exchange’s requirements on KB TECH’s pricing integration solution included:

·      Flexibility to cater for different source systems

·      Low latency

·      Security

·      Limit Exposure

A specific example involved a member of the Exchange acting as Fuel Oil Market Maker whose internal pricing system was based on a spread sheet system with live updates across some 150 instruments, both outrights and spreads, updating every second.

Another example was an exchange member operating as a Market Maker in Iron Ore with an in-house platform built on Microsoft .NET.  To meet the Exchange’s launch targets KB TECH provided a separate “DMZ” area of the KBTS bus with a “Smart-Router” service enabling the Market Maker to communicate with the main KBTS bus.

KB TECHs Market Making tools injected these prices into the Exchanges trading platform with minimal latency together with check and control mechanisms for the Market Maker and Exchange. This was undertaken with zero development overhead or operational duplication for the Market Maker thus positively influencing its willingness to provide liquidity to the Exchange.

Integration of a Clients data with the Deutsche Borse CEF Market Data Service

In order to achieve global distribution of its data this Exchange client required its real-time data to be integrated with the Deutsche Borse (DB) CEF market data service.

The project involved interfacing the clients FIX API with the CEF service together with splitting the data into business channels (asset classes) as required by the Exchange. Depending on the data class real-time, delayed and snapshot delivery of data was required.

Where required, changes were made to the client’s data format and delivery processes in order to efficiently interface to CEF.

Full project management was undertaken by KB TECH including the technical and operational liaison with the CEF technical team.

The solution, based on elements of KB TECH’s Trading platform, was delivered within schedule and on budget with zero impact on the clients systems.

Complete Data Distribution Infrastructure for a Regulated Exchange

The Exchange required a cost effective, well-proven and easily deployable price distribution and administration system to fulfil its obligations as a regulated exchange together with delivering its business development requirements for maximising price transparency and data income objectives.

Other business drivers included:

Controlled distribution of data collected from various sources.

·      Supply of real-time and end-of-day data for both regulatory, marketing and commercial purposes.

·      Client system integration.

·      Ease of access with minimum end-user deployment requirements.

The KB TECH data distribution services utilised included:

·      Range of protocols (FIX, xml etc.) for delivery of the exchanges real-time data to the data vendor community (e.g. Thomson Reuters) etc.

·      Administrative control tools for producing a range of data sets with individual permissioning functions.

·      Interfaces to a range of data sources including the client’s own trading engine, external sources of data

·      Real time and delayed data.

·      Client branded mobile phone data application for use by exchange staff, members of the exchange etc.

·      KB TECH’s PriceView Web and browser based pricing and analytical tools and member services.

·      KB TECH’s .NET SDK incorporated in a Windows plug-in for real-time streaming of prices into an Excel spread sheet.

·      Real-time data basing and storage of data.

·      Back up and automatic failover processes.

Outsourced IT Dept.  

KB TECH provided a regulated Exchange, with an outsourced IT department for the development and support of all aspects of the Exchanges technical infrastructure apart from the core-trading engine.

In addition to the supply of resource for acting CTO, various development roles and project management services, this also included the supply of a range of KB TECH’s products on a licensed basis.

The client benefited from an off balance sheet cost effective service whilst at the same time presenting certain KB TECH staff as their own dedicated resource.

Governance of the outsourcing was via a detailed Service Level Agreement ensuring delivery and quality levels were maintained at all times.

KB TECH’s extensive experience, both in terms of its products and staff, within the financial markets, enabled this outsourcing to be set up very quickly and efficiently for the client.

In addition to the day to day IT and management roles provided, the outsourcing included analysis of new business driven technical developments both for the Exchange and its members. Extensive project management resource was provided for a range of projects including migration from legacy systems and liaison with third party suppliers to the Exchange.

Data Distribution Experience with Exchanges.

1.0 Introduction

KB Tech has extensive experience and an established range of products and services in the field of data distribution on behalf of exchanges and other organizations generating real-time data. This enables exchanges to publically disclose in real-time, or delay as appropriate, information on the exchange’s market via a range of products and services. Details on KB Tech market surveillance tools as related to an exchanges market data are provided in a separate document.

Products and services include mobile and web based price display platforms together with industry standard APIs. These are detailed in section 2.0 of this document.

As detailed later in this document these platforms allow end user clients / members, other relevant organizations together with the exchanges’ own staff to gain easy and convenient access to current prices from the range of contracts traded on the exchange.

All platforms were developed and designed with the objective of easy rebranding if required by the client for their business or 3^rd parties.

In addition to its standard services KB has a wealth of experience in managing and developing bespoke data feeds and interfaces for clients via KB’s own internal programming resource. This includes protocol conversion, data collection from legacy systems and other bespoke real time feed development and applications.

KB Tech’s experience with data distribution extends beyond technology services extending into general marketing, administration, project management and data analysis. Section 3.0 of this document provides more information on these additional services.

Examples of previous deployments and data management projects undertaken by KB Tech are presented in section 4.

 2.0 Range of Data Distribution Products and Services

 2.1 FIX:-FIX v5 sp 2 service; example utilizations being market data to Thomson Reuters and to Deutsche Bourse’s CEF feed.

2.2 AMQ PAPI / SDK: – Using an Azure Service Bus client, JSON over AMQP, or our easy-to-use .NET SDK, third parties can connect to a message bus dedicated to external connections, fed directly from the production bus.

2.3 Web Services, FTP, snapshots: – For initial population of screens or a snapshot at any time, KB provides HTTP web services that return contract details and prices in XML format, which can be easily incorporated into other applications, reports, emails etc.

2.4 Web: – PriceView a view-only streaming price discovery solution allowing the exchange or broker to display its market to interested parties without the need for any installation, plug-ins or network adjustments (e.g. firewalls and proxy servers).

2.5 Mobile: using the same delivery technology as the web version, PriceView mobile provides streaming prices and news to iOS and Android.

• This is a multi platform application utilizing an Apache Cordova library and PhoneGap allowing web tools to be used for generating native applications in appearance.
• The authentication service for the mobile platform (i.e. administration of what users can gain access plus the level of data and whether live or delayed) is linked to the same authentications service used by the web based price display service.
• In addition the data delivery mechanism (SignalR) is common for the mobile and web based platforms.
• From its inception the platform was developed such that it is easy to skin / white-label and hence be utilized by organizations wishing to distribute and control their data to clients and/or other end users.
• Excel: Using our own .NET SDK incorporated within a Windows plug-in, real-time prices streamed directly into an Excel spread sheet. Implemented by an exchange, CLTX, in order to deliver prices to Bloomberg.

 3.0 Further Details of KB Tech’s relevant Data Distribution experience and services

• Working with regulated exchanges in their trading business KB has deployed communications and operational infrastructures, which includes managed data centers and redundant backup sites.
• Liaising with the partners of Exchanges’ data distribution business including traditional quote vendors (e.g. Thomson Reuters, Bloomberg etc.) and other data distributors who connect to the exchange’s data gateways.
• An element of this liaison involves the assistance, administration and monitoring of the quote vendors initial integration process providing technical support where required.
• Front-line support with the vendors is also undertaken when they experience problems either with their own communications process and/or hardware or indeed if there is a general problem with the data itself.
• In addition to its internal resource KB has formed close working relationships with a number of relevant service providers including, communication and network companies, technology suppliers, technical support specialists, hosting companies etc. In this way KB is able to utilize these relationships in undertaking specific services for the exchange if required.
• The KB executive team has a wealth of experience spanning some 50 years of practical sales, marketing, product management, deployment and project management activities within the complex eco-system environments such as the real-time data distribution business. This includes director level experience within listed business, international technology and service organizations, investment banks and exchanges.
• KB has extensive experience working with Market Data Distribution. The KB Trading System provides the following benefits in this area:
  • Ease of integrating a wide range of data feeds.
  • Excellent track record in delivering very high speed, high volume transactional data management solutions.
  • Control tools’ ensuring relevant data is delivered only to authorized distributors.
  • Comprehensive data administration tools that can be adapted to new markets.
  • Proven deployment at exchange and quote vendor sites.
• Following its extensive experience in dealing with the vendors KB is able to ensure all the appropriate diagnostic procedures are put in place when a fault call is received. In this way the need to contact the source of the data is minimized and ensures that faults are dealt with as quickly and efficiently as possible.
• Data vendors are normally obligated to report their usage of the data on a regular basis. KB has experience in the management of the collation of these returns in conjunction with the exchange. This includes obtaining the details of which end-users of the vendor are viewing the real time data and liaising with the exchange on a regular basis for the purposes of maximizing potential size of the geographic, market sector and general device deployments viewing the data.
• KB can provide advice to any data vendor of the exchange requiring assistance with handling the data including presentations and meetings if required.
• KB has internal programming resource for protocol conversion, data collection and other related real time feed applications. Hence guidance can be given to exchanges should they wish to change their internal data service. This could be for the purpose of improving the source data collection, data basing etc.

4.0 Conclusion

As seen from the above sections KB Tech has over 10 years of proven extensive experience in data management for exchanges. This includes working with large and smaller exchanges alike with a tailored approach reflecting the specific business needs and other key drivers of the customer.