Major exchange operators, the Swiss Stock Exchange and Nasdaq, have established a jointly owned company to expand the European microwave network, fostering microwave-based trading connections in Europe. Both companies, however, didn’t disclose the financial terms of the deal or amount of their investments.
Dubbed ‘RF Nordic Express AB,’ the Zurich-based joint-venture, will build and operate microwave routes to provide clients with low-latency connectivity to execute trades and transmit market data from Stockholm to London.
This allows trading companies and individual investors to gain a competitive advantage and cut a few milliseconds off of their execution times since microwave communication transmits data as radio pulses through the air.
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Microwave technology allows trade data for all securities listed at SIX, which now owns and operates the largest microwave network in Europe, to be transmitted more than twice as fast as connections based on fiber optic technology fibre optics, which sends laser light pulses down glass strands.
Stretching between London and Frankfurt
This is particularly important to high speed and algorithmic trading clients, who have many points of access to international trading opportunities. The Swiss bourse’s investors now benefit from extended coverage that includes routes from Zurich to London, Frankfurt, and Milan as well as from Milan to Frankfurt and London. SIX, which now owns and operates the largest microwave network in Europe, also claims that using their technology will improve liquidity, tighten spreads, and enhance risk management capabilities.
The expansion of SIX’s routes further validates its offering of delivering specialist intra-region connectivity through an international microwave network to the global financial community. The direct connectivity allows traders and professional service specialists to gain a competitive advantage, quickly sending and receiving large volumes of data without the need to have a presence at the exchange. The offering also enables investors to take advantage of the arbitrage opportunities between different markets.
Reinier Fliehe Boeschoten, Member of the Board of 12H AG, commented: “With this new investment by SIX in 12H AG we will be able to continue upgrading our current services and keep providing innovative new products to our customers. 12H AG is proud to be a part of SIX and is looking forward to working together with Nasdaq in creating a service between London and Stockholm.”