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Most Innovative Data Product/Service
Bats Indices: Bats Europe
Bats Europe, which launched in 2008 and is now Europe’s largest equity platform by value traded, moved to capitalise on its trading success in June 2016 by launching its own set of indices. Its aim was simple: to introduce competition to a monopolised area of the market and a low-cost alternative to commonly used indices such as FTSE and Stoxx. Bats has stolen market share from incumbent exchanges in trading with strong technology and a low-cost approach, and it has used the same model for its indices. It launched 18 UK-focused benchmarks, covering large and small-cap stocks, which are free to private and professional investors and media firms, as well as for benchmarking purposes. To differentiate itself from competing products, the indices also have simplified licensing arrangements for those wanting to build investment products, and are also published in real time rather than on a 15-minute delay like many existing products.
Clarient Entity Hub: Depository Trust & Clearing Corporation
Financial firms have often found it difficult to work together, but several firms have put aside their rivalries in the field of reference data. US post-trade giant the Depository Trust & Clearing Corporation has partnered with six global banks, including Barclays, Credit Suisse, Goldman Sachs, JP Morgan Chase and State Street, to establish Clarient in response to the industry’s call to reduce operational complexity and address evolving risk and regulatory requirements. It is a comprehensive reference data solution providing control, standardisation and transparency during the client onboarding process and ongoing client lifecycle events. Having gone live in March 2015, Clarient is already being used by over 100 global firms.
Group Ticker Plant: London Stock Exchange
The London Stock Exchange’s Group Ticker Plant, which was launched in March 2016, had been a long-awaited project at the exchange. While technologically complicated, in essence, it enables market data to be distributed to users at ultrafast speeds, so quick that they approach the speed of light. Today’s latency-sensitive trading environment has led firms to explore everything from weather balloons through to microwave communications to shave microseconds off the delay between information being sent and received. But the LSE’s project uses a form of technology known as field-programmable gate arrays. These allow repetitious tasks, such as transmitting data, to be performed efficiently – the LSE claims that data can be distributed with a latency of less than five microseconds using its platform. By comparison, light takes 3.3 microseconds to travel one kilometre in a vacuum. The platform was built by the exchange’s technology subsidiary, MillenniumIT.
Nasdaq Smarts: Digital Reasoning Machine-Learning Partnership
Nasdaq continued to improve its widely used Smarts surveillance platform this year by boosting it with machine-learning capabilities. In partnership with Digital Reasoning, the addition of the technology will enable surveillance officers to perform contextual analysis around certain pieces of information related not only to trading actions, but to the profile of traders themselves. Specifically, it enables data around communications to be reviewed in the context of potential market abuse but can also be deployed to provide early warnings around other aberrant behaviour, such as rogue or insider trading. Nasdaq’s partnership, born from an investment by the US exchange group in Digital Reasoning’s Series D investment round, is one of the first to fully integrate machine learning. The early stages of the project’s implementation will focus on communications, but Nasdaq executives said it could be expanded to wider analysis of unstructured data.
Project Neptune: Neptune Networks
Officially launched in August 2015, Project Neptune opened up to users beyond its original launch sponsors, which included the largest banks and buyside firms. The project aims to standardise the different protocols used by fixed income trading venues, partly as a response to rapidly declining liquidity in bond markets. The initiative is timely, given the growth in the number of fixed income platforms that have been launched in recent years in response to the changing form of these markets. The technical lead on the project is Etrading Software, which has handled similar consortia-based standardisation projects in other asset classes. It initially focused on European bonds but is expanding into Latin American bonds and emerging markets debt. In July, Neptune formed a company, Neptune Networks, to run the industry utility, led by former Goldman Sachs trader Grant Wilson.