To cope with today’s fast-evolving market, exchanges regularly upgrade their technology. Tanzeel Akhtar examines the challenges and opportunities exchanges face when overhauling their systems. How good are they at making these decisions and handling transitions and what could they do to improve?
Two large technology migrations are currently under way for futures and options exchanges. The London Stock Exchange has been migrating parts of its business onto TMX’s Sola since 2009. At the same time, Nasdaq OMX is involved in an overhaul of its equity, derivatives and fixed income trading platforms.
Making such radical changes to an exchange’s technology without interrupting trading is a huge challenge – and with new systems costing large sums, the stakes are high. And what is worse, if the new technology does not deliver the promised improvements, exchange members are likely not only to be vocal in their complaints, but might...