Building the Trading Systems of Tomorrow

Building the Trading 

Systems of Tomorrow 

Singapore’s 2nd Annual Technology 

& Innovation Conference 

Bob Caisley – SGX CIO 

12 October 2011 

Version 1.0

Welcome to Singapore 

• Home to global companies Asian Pacific headquarters 

– > 1/3 of Fortune 500 

• Wealth hub with largest institutional investor base in Asia 

– >US$1.5 trillion assets under management 

• World’s 4th largest foreign exchange trading centre 

– >USD 330B average daily volume in 2010 

• Asian logistics centre 

– World’s largest bunker port and 2nd largest container port 

• Trading centre for commodities 

– 300 global trading companies 

SGX The Asian Gateway 

Building the trading systems of tomorrow 

1

SGX at a Glance 

The Asian Gateway 

Global investors and 

companies connecting 

to Asian growth 

• International listing venue 

• Single access to Asian 

derivatives 

• Central Clearing house 

• Growing suite of commodities 

• Post trade processing hub 

Asian companies and 

investors connecting 

to global capital 

Revenue 1 Market Cap 2 Employees 

US$529 million US$6.0 billion – 2 nd in Asia/7 th in World 600 

1 

For the financial year ended 30 June 2011 

2 

As of 25 August 2011 


Building the trading systems of tomorrow 2

Contents 

1 

SGX Reach Initiative 

2 

Race to be the fastest exchange 

3 

Why innovation is critical to remain competitive 

4 

Where to from here 



SGX Reach 

• S$250m technology investment programme to provide: 

– World Class Data Centre 

– Premier Co-location facility 

– Fastest Trading Engine 

– Hubs in key financial centres connecting to Singapore 



SGX Reach announced in June 2010 

• Build a world class data centre 

Launched on 11 April 2011 

• Build premier co-location facility 

Launched on 18 April 2011 

• Launch new trading engine in 3Q 2011 

Launched on 15 August 2011 

• Provide door to door order response 

time latency of 90 microseconds 

Live production figures of 79 µs at 90 th 

percentile 

• Capable of processing up to 1 million 

transactions per second 

Achieved 40k TPS in the production 

environment. 1 million in our test lab 

• Hub sites in key financial centres 

To be implemented in January 2012 



Building a world class data centre 

• Designed to Tier 4 standards using latest technology to 

provide efficient delivery with minimal impact to the 

environment 

• Modular and highly resilient Data Centre design 

• Highly Secure facility providing up to 2 Megawatt (MW) of 

redundant 2N Power and Cooling 

• Significant capacity for future growth whilst maintaining fair 

and equitable access 

• Carrier Neutral facility with large range of local and 

international carriers 



Building a premier co-location facility 

• Purpose built co-location facility, design to cater for customers 

and SGX stringent requirements 

• High secure environment two independent security systems, 

biometric access, recorded CCTV, electronic key 

management 

• Fully resilient Co-Location data centre facility and network 

infrastructure with equidistant cabling 

• Ultra-Low network latency at 7 microseconds to SGX trading, 

and market data systems with direct access to other markets 

• Flexible expansion options for power and racks with direct 

cross-connects. 

• 24x7 onsite operational hands and feet support 



SGX striving to be the fastest, safest and 

most reliable exchange in the world 

• SGX Reach Trading Platform is a creative combination of 

technologies: 

– Genium iNET trading engine solution from Nasdaq OMX 

– Mellanox InfiniBand switches 

– Mellanox Messaging Accelerator software 

– HP ProLiant blade servers 

• HCL infrastructure support 



8

How fast is 90 µs 

• 1 µs is equal to one millionth (10-6) of a second 

• The average human eye blink takes 350,000 µs 

• A camera flash illuminates for 100,000 µs 

• Standard camera shutter speed opens the shutter for 8,000 µs 

Imagine if a person could travel from Singapore to New York 

within the blink of an eye 

Now imagine travelling there and back 3,889 times in 

the blink of an eye – each trip is 90 microseconds 



Race to be the Fastest Exchange 

The race to zero – October 2010 

HKEx 

150,000 µs 

KRX 

80,000 µs 

SGX 

10,000 µs 

TSE 

5,000 µs 

ASX 

3,000 µs 

NDAQ 

143 µs 



Race to be the Fastest Exchange 

The race to zero 

– October 2011 

HKEx 

150,000 µs 

KRX 

80,000 µs 

TSE 

2,000 µs 

ASX 

300 µs 

NDAQ 

Everyone claims to be the fastest 

• 2 November 2010 – LSE claims record breaking system 

– the LSE announced that its trades were being conducted at an average of 126 

microseconds – a figure largely accepted in the industry as a record for live use. 

• 6 June 2011 – Cinnober claims fastest matching engine 

– Cinnober said it had achieved latency across the servers which conduct trading of 

“well below ten microseconds”. 

• 28 July 2011 – Nasdaq OMX claims 98 microseconds customer experience 

- Bob Greifield states “using a 10 Gigabit Ethernet connection in a co-location facility, roundtrip 

order latency is now approximately 98 microseconds for exchange customers.” 

• What are you measuring and where are you measuring from are important factors 

when comparing different latencies 



Definition of “Door to Door” Latency 

• The time it takes for the exchange to receive, process and 

acknowledge an order. 

• Measured from the customer side of the exchange 

firewall/gateway within the exchange’s data centre. 



Door to Door Latency Diagram 

Corvil CNE-5400 

Matching 

Engine 

Order 

Processed 

by 

Matching 

Engine 

Order Entry 

Secure Access 

Gateway 

Start #1 

Start #2 

Co-Location 

Rack/Servers 

Order Ack 

Stop #1 

71µsec 

Stop #2 

78µsec 

Latency Round-Trip Door-to-Door #1 Rack-to-Rack #2 

Proprietary API 

Median 71µsec 78µsec 

90 th Percentile 79µsec 86µsec 

FIX 5.0 

Median 110µsec 117µsec 

90 th Percentile 207µsec 217µsec 



Focus area for improvement 

• Remove jitter to provide the best predictable response time all of the time 

SGX The Asian Gateway Building the trading systems of tomorrow 15

Technology Stack - SGX Reach 

NASDAQ OMX 

GENIUM Trading & INET Message 

Bus 

HP 

Blade 

Servers 

RedHat 

Linux 

Operating 

System 

Mellanox 

Message 

Acceleration 

Software 

Corvil 

Latency 

monitoring 

IBM 

BNT 

CutThru 

Switches 

Cisco 

Nexus 

7000 

Mellanox 

QDR 

InfiniBand 

Network 

HCL 

Infra 

Support 

Services 

SGX 

Co- 

Location 

Facility 

SGX The Asian Gateway Building the trading systems of tomorrow 16

Technology Architecture – SGX Reach 

Mellanox InfiniBand 

Cisco Nexus 

HP Server 

HP Blade 

IBM BNT G8124 

IB QDR 

40Gb/s 

Secure Access 

Gateway 

D 

10GbE 

Fibre 

Corvil CNE-5400 

Access Layer 

Switch 

Equidistant Cabling 

Matching 

Engine 

R 

Matching Engine (ME) 

HP DL380 G7 

Xeon X5677 3.47 GHz 

Fusion IO 

Redhat Linux RHEL 5.5 

Mellanox VMA Libraries 

Nasdaq OMX Genium INET 

(Exchange Trading Software) 

Access Gateways (GWY) 

HP BL460 G7 

Xeon X5670 2.93 GHz 

Redhat Linux RHEL 5.5 

Mellanox VMA Libraries 

Nasdaq OMX Genium INET 

Native API &FIX V5.0 Gateways 

Co-Location Cabling 

Equidistant Cabling of; 

100Mb; 

1 GbE 

10GbE* 

10GbE* - Subject to Customer Demand 

Co-Location 

Rack/Servers 



17

Summary – How did we do this 

• Minimize customer impact 

• Strong focus, belief in ourselves 

• Use of customised off the shelf solutions 

• Use of technology partners to provide best advice for key activities and not 

dependant upon one to complete the entire programme 

• Strong project governance and leadership 

• Dedicated, committed team with the right skills 

• Blood, sweat and tears 



Where to from here 

• Competition is hard on our heels, to be competitive you need good innovation 

• Continue to invest in innovative technologies 

• Working with partners 

– HP and RedHat to provide bare metal tuning of the hardware and operating system 

– Mellanox VMA support for TCP/IP 

– Nasdaq OMX Genium INET improvements 

• Aiming for < 69 microseconds door to door at 90th percentile within 12 months 

• Focus on customer handoff to reduce their internal latency 

– 10 GB 

– Infiniband 

– 100 GB Ethernet 

– Reduction in Co-location network latency from 7 microseconds to

Remaining Competitive Requires Continuous Innovation 

• Embrace competition 

• Evaluate your teams skill sets 

• Keep cost of Innovation down by minimizing the disruptiveness of new technology 

• Ensure that innovation is sustainable and does not compromise the integrity or 

reliability of the Financial Markets Infrastructure 

• Work with a wide variety of customers to ensure advancements, not only technology 

improvements but other areas like; market structure changes benefits the community 

as a whole 



Steve Jobs – Stamford Commencement Address 

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by 

dogma – which is living with the results of other people’s thinking. Don’t let the noise 

of other’s opinions drown out your own inner voice. And most important, have the 

courage to follow your heart and intuition. They somehow already know what you 

truly want to become. Everything else is secondary.” 



SGX Asia with Global Reach 

LONDON 

CHICAGO 

SGX 

TOKYO 

NEW YORK 



Thank You 

Singapore Exchange • London • Tokyo • Beijing 

2 Shenton Way, #19-00 SGX Centre 1, Singapore 068804 

Main: (65) 6236 8888 Fax: (65) 6535 6994 

This presentation is being made available to certain authorized recipients for their general information only. 

While SGX and its affiliates have taken reasonable care to ensure the accuracy and completeness of the information provided in this presentation, they will not be liable for any loss or damage of 

any kind (whether direct, indirect or consequential losses or other economic loss of any kind) suffered due to any omission, error, inaccuracy, incompleteness, or otherwise, any reliance on such 

information. Neither SGX nor any of its affiliates shall be liable for the content of information provided by or quoted from third parties. Examples provided are for illustrative purposes only. The 

information in this presentation is subject to change without notice. 

Any recirculation, transmission or distribution of this presentation or any part thereof by any third party requires the prior written permission of SGX. SGX and its affiliates disclaim all responsibility 

and liability arising in connection with any unauthorised recirculation, transmission or distribution of this presentation or any part thereof. 

© SGX Ltd, November 2010 

www.sgx.com 



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Building the Trading Systems of Tomorrow

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