MICEX-RTS to launch new trading system in 2015
MOSCOW. May 25 (Interfax) - OJSC MICEX-RTS plans to launch a new trading system in 2015, the leading Russian stock exchange's managing director for information technology and executive board member Vagan Vardanian told reporters on Thursday.
"The exchange will develop an IT strategy by July, when it plans to present it for discussion to the board of directors. The main goal of the strategy is to create a new trading system at the end of 2014 - beginning of 2015," Vardanian said.
He said it the exchange needs to decide how to arrive at this goal, whether it should support two systems or choose one. The merged MICEX-RTS exchange currently operates on two trading systems.
The new trading system must meet three criteria: it must be fail-safe, fast and productive.
"In terms of speed, we are already among the top 10 world exchanges, the plan is to enter the top five. However, we are not aiming to become the leader among exchanges by this indicator. We don't want to race for microseconds, because this usually comes at the expense of reliability," Vardanian said.
In terms of productivity, the exchange plans to increase the number of transactions processed by the system per second by many times over. Right now the system's productivity is 20,000 transactions per second with a peak load of 3,000. "We ant to bring it up to 200,000-300,000 transactions per second without a reduction of the reaction time," Vardanian said.
Current platform
Vardanian said that in late 2011, what was then still only MICEX (MICEX and RTS merged on December 19, 2011) made the transition to a new trading system. MICEX had operated on the HP Unix platform since the 1990s, without any serious technological changes being made.
With the development of algorithm trading, the productivity of this system became insufficient and the exchange decided to switch to Intel X86 with the RedHat Linux operating system. This should have been done three or four years earlier, Vardanian said, adding that the change in platform cost the exchange about $1 million.
"This platform now fully meets market requirements, but we are not confident that this will remain the case by 2015. We are already seeing new trends in exchange technology, particularly parallel processing, when a transaction is processed not be one server, but by several, distributing the workload, for example, by type of security," Vardanian said.
He said malfunctions on the exchange's main market (formerly the MICEX market) were partially related to the "colossal changes" that were made to the system when it was replaced.
There were three technical malfunctions on MICEX markets in 2011, including one in August that was due to the human factor, and two in the first half of November. There was one malfunction on MICEX markets in 2012, on April 23.
Vardanian said that the trading accessibility rate (amount of time out of the stated time that trading is accessible to participants) on MICEX-RTS is current 99.97%, unchanged from last year. In the first quarter it was 100%. "This is a fairly good indicator compared to word exchanges. At the LSE, for example, this figure was 99.83% in 2011," he said.
Near-term plans
Vardanian said that the exchange plans to launch a new version of the FORTS trading platform at end of the third quarter or beginning of the fourth quarter of 2012. "We hope that this will make it possible to reduce the number of abnormal situations and reduce delays in transaction processing. A decision has already been made to test the system before the start of trading in the early hours of the morning, using employees of the merged exchange at the branch in Novosibirsk due to the time difference," he said.
In addition, by the end of 2014 the exchange plans to set up a new data center, he said. There are now three data centers on MICEX markets: two main ones and one backup. The main centers are located in the same buildings as the exchange on Bolshoi Kislovsky Pereulok and Kolskaya Ulitsa in Moscow. "These data centers will probably move to another building and be substantially modernized," Vardanian said.
However, MICEX-RTS does not plan to significantly expand its IT staff, he said.
"Undoubtedly, new employees will appear, but these will be targeted decisions, to strengthen expertise in a number of areas," Vardanian said. MICEX-RTS now has a staff of about 350 people servicing the trading system.