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Ecosystems for Success

A special report on the importance of connectivity in capital market ecosystems.

ASX are proud to sponsor this forward-looking report from KapronAsia on the evolution of capital market ecosystems and the importance of market connectivity. 

"Ecosystems for Success" discusses the emergence of exchange colocation facilities and the value they offer for market participants, taking a closer look at open versus closed operating models. 

Researchers have gathered insights on connectivity in the global financial services industry and report on these findings using  expert opinion, illustrations and casestudies. 

Watch Kapronasia's panel discussion on the topic and read more in the report.

Report overview

The advent of electronic trading in the 1980s in the United States introduced a new era of high frequency trading (HFT) whereby firms tried to get their trading applications as close as possible to an exchange’s matching engine. By the 2000s, the exchanges were moving their matching engines into colocation data centres, where they were joined by the HFTs that would find no better substitute to being colocated in the same building as the matching engine itself.

The HFTs brought with them their service providers and the network carriers, forming an ecosystem of member firms and vendors. Given the high premiums participants were prepared to pay to have rack space next to the matching engine, it was not long before exchanges realised that there were substantial benefits in operating their own colocation facilities. The exchange-operated colocation data centre was born.

Key highlights