Eurex will launch its new software Release 10.0 on 26 November 2007 together with a functionally enhanced interface for the transmission of unnetted market data.
Another interface, scheduled for the first half of 2008, is geared to facilitate the efficient management of trading activity. This will allow faster access to the Eurex system than has been possible to date. Both measures are in line with the consistent progress of Eurex's 'Technology Roadmap' initiative, designed to further optimize the Eurex trading framework.
New trends in derivatives trading - particularly algorithmic trading - typically also lead to changing demands on electronic trading systems. In the meantime, trading has become a lot faster, while at the same time much more information is required - and more quickly than previously. The implementation of its Technology Roadmap is part of the extensive efforts undertaken by Eurex to accommodate these requirements.
Technology Roadmap Launched in 2006
The initiative places emphasis on hardware and software upgrades, new services and a diversified offer for the transmission of market data. As recently as December 2006, Eurex quadrupled the bandwidth for all participant connections from 256 kbit/s to 1024 kbit/s. Simultaneously, market participants were able to receive unnetted and real-time market data for the first time, via the new 'Eurex New Socket Data Feed'.
This interface is currently used by 80 market participants, in addition to the existing VALUES API standard interface. At the beginning of 2007, Eurex also invested in new hardware components with a view to further enhancing system performance, being one of the first exchanges to introduce processors based on the new Itanium technology.
Consistent Implementation of the Technology Roadmap Continued in 2007
Through the now-announced, functionally-enhanced interface, participants will be able to receive additional unnetted market data (market depth) from November 26, 2007 onwards.
Primarily, this relates to market depth data for Eurex options. Another novelty is represented by the possibility for participants of subscribing to the Eurex market data they require, in the form of individually compiled packages, in line with their trading focus. Moreover, participants will also be able to flexibly determine the bandwidth they use, in line with their customized data packages. This will allow them to optimize the costs of their trading infrastructure.
Going forward, Eurex intends to distribute unnetted market data exclusively via the new interface to be introduced with Release 10.0, with the current New Socket Data Feed to be discontinued in the medium term.
Technology Roadmap to be Completed in 2008
The first half of 2008 will see the introduction of another optional interface, which will be totally geared to the latency-minimized entry and management of trading-related system entries. Thanks to a 'low-footprint' solution, it will also facilitate connectivity of all participants, independent of the infrastructure they use. In this way, Eurex will respond to participants' requests for customizable connectivity options.
Risk Control Optimized with Eurex Release 10.0
Within the scope of its Technology Roadmap, Eurex also intends to implement some new system functionalities with Release 10.0, in addition to the extended interface offer.
To optimize risk control, additional risk-reducing functionality will be introduced, allowing Clearing Members to define certain risk limitations, per product and per Non-Clearing Member:
• Maximum order size
• Maximum number of orders for a given period of time during a trading day
• Number of unexecuted orders in the order book
In addition, participants will be able to define these boundaries for their individual trader subgroups. To further enhance security in trading and clearing operations, Eurex will introduce a 'suspend trading' function, which will enable Clearing Members to trigger a 'trading halt' for their Non-Clearing Members (NCMs). In the event of a system failure affecting a specific NCM, the respective Clearing
Member will be able to use the new function to interrupt that NCM's connection to the exchange, and to simultaneously delete all of the NCM's unexecuted orders in the Eurex order book.
Finally, a new order type - 'non-persistent' orders - will be introduced with the new release. At present, all orders and quotes are 'persistent': This means that they are protected against loss of data, using a special restoration process at the Eurex back-end. In contrast, 'non-persistent' orders will not be protected by this mechanism. Hence, they will reduce processing time at the Eurex backend, helping to optimize system latency. Effective with the introduction of Eurex Release 10.0, quotes will generally be non-persistent, whereas participants will have a choice as far as orders are concerned.
Meanwhile, given the increased requirements with regard to the number of system transactions to be processed - current formats only support a maximum of one billion orders, and one million trades for each exchange trading day - new formats are required for both order and trade IDs. With Release 10.0, these codes within the Eurex® system will be converted from a purely numerical to an alphanumerical format.
Eurex Release 10.0 will therefore not be backward-compatible, making it mandatory for all Eurex participants to adapt their in-house applications to the new system release in good time.
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