Demand for points-of-presence (PoP) connectivity outside of North America is rapidly growing, along with the continuing requirement for greater access to high-speed infrastructure and connectivity to the world’s venues.
Not a week has gone by over the last few months without large scale expansions of service provided by large international infrastructure companies taking place, and this week is no exception as Canadian infrastructure firm TMX Atrium today announced an expansion program within its European network involving investment in mini-PoPs in Paris and London.
An expansion of this particular method of connectivity technology into Europe is a new venture for TMX Atrium in the territory, however the firm already has extensive PoP hardware in place in North America, which has experienced enough high demand to warrant an upgrade, which was reported by Forex Magnates yesterday.
PoPs have become increasingly popular since their introduction around seven years ago, a matter which came up in discussion at this year’s IFXEXPO in Cyprus.
Seeing The Point (Of Presence)
Jeff Wilkins of ThinkLiquidity explained that such systems not only increase speed of execution but also are a means of counteracting harmful attacks on systems. “More and more denial of service (DOS) attacks have come about recently” explained Mr. Ward. “Distributed PoPs allow protection against DOS attacks. We always advise that this type of infrastructure is put in place”.
Discussion moved to the increase in use of PoPs, which dates back to 2005/6 when DOS attacks began. Most DOS attacks were causing damage to the primary websites of those brokers but at the time the brokers didn’t give thought to the infrastructure. Most went down and trading stopped for minutes, or sometimes hours. That was the first time PoPs were discussed.
Another facet is within the downloading of software from sites. For example, in the case of a broker offering its clients a desktop platform which handles a lot of traffic, a PoP can stabilize the speed and download performance of this process.
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Mini-PoPs Expand European Footprint
According to TMX Atrium, Mini-POPs allow for rapid expansion into smaller data centers to address clients’ needs for simpler and more cost effective access solutions.
Yesterday, the firm announced the upgrade of its North American core network to support the needs of latency intolerant customers requiring higher-throughput and heightened access to market data feeds across the core fabric, adding further weight to what appears to be something of a race to zero between traders and brokers alike against latency, which is well underway in North America and is now gaining considerable traction in Europe, via North American infrastructure providers.
TMX Atrium’s investment in mini-POPs in Paris and London is targeted at smaller clusters of clients located in smaller financial liquidity hubs. The mini-POPs enable fast and flexible connectivity to the TMX Atrium network and ensure clients can get on-net simply and quickly. With these multiple POPs, the additional deployments are aimed at providing the capacity to offer clients greater resilience and additional access options.
On the firm’s investment in the implementation of mini-PoPs, Emmanuel Carjat, Managing Director of TMX Atrium stated, “We are constantly looking at ways to evolve the responsiveness and flexibility of the services available for our clients. Opening a series of mini-POPs across major cities ensures we can answer clients’ demands for faster access as the TMX Atrium community continues to grow. It also ensures that TMX Atrium can quickly and easily reach smaller clusters of clients. These clients can have direct access to the depth and breadth of trading participants and multiple venues already connected to TMX Atrium.”
The Need For Speed
This is certainly concurrent with the firm’s continual European infrastructure expansion, as explained to Forex Magnates by Mr. Carjat in March this year, when he pointed out that high demand for point to point connectivity is present between Moscow and London, a point borne out by many developments within other North American firms such as SS&C and Redline Solutions, and Volta with its new 45,000 square foot datacenter set to open in London this year.
Perhaps more controversially, last week’s connection of the UBS Multilateral Trading Facility dark pool to the TMX Atrium community is another example, pre-empting possible rulings by regulators to stem what they see as resultant disruptions caused by high speed algorithmic trading.
Although the latency arms race is a predominantly American phenomenon, it is clear that European traders are beginning to expect more from their systems in terms of performance, indicating that high-frequency and electronic algorithmic trading is very much alive and well across the Western world in general, despite pending regulatory directives aimed at putting a stop to certain aspects of it in some jurisdictions of Europe.