The Johannesburg Stock Exchange (JSE) yesterday celebrated the start of a new era for its equity market with the launch of equity trading platform Millennium Exchange, developed by technology solutions provider MillenniumIT.
The day also marks the moving of the platform from London, where the trading engine has been situated for ten years, to the JSE building in Johannesburg. These changes are aimed at enhancing operational efficiencies for market participants, who are expected to benefit from executing transactions almost 400 times faster than the present trading solution.
The platform is housed within the JSE’s recently completed new state of the art data centre based on Tier 3 specifications and is designed to ensure 99.98% availability.
The seamless migration from the previous TradElect platform follows Borsa Italiana’s identical switch last week. As with the JSE, this move was successful and followed extensive testing and consultation with stakeholders.
JSE’s Equity Market Director Leanne Parsons comments, “As we have seen with the Borsa Italiana migration last week and similar migrations during the past year, the new platform provides exceptional levels of performance, functionality and capacity. The JSE’s move to the new equity system, which we have nicknamed Project Jaya meaning ‘victory’ in the language of Sri Lanka, is a victory for the market.”
The move could not have happened without effective cooperation between the exchange and all its clients, says Parsons. “We would like to extend our sincere appreciation and thanks to all our clients for their efforts and support.”
Parsons says that the adoption of Millennium Exchange could have a significant impact on trading volumes by attracting a greater share of high frequency trading when collocation and the appropriate billing models are in place.
Trading volumes increased significantly when the JSE adopted trading platform JSE SETS in 2002, and climbed again when the exchange moved to the present trading platform JSE TradElect in 2007. JSE TradElect was licensed from the London Stock Exchange and maintained and operated by the London bourse. “There is anecdotal evidence to suggest that when exchanges increase their trading speeds they also boost levels of trading. This is important in order to deepen a market,” adds Parsons.
Parsons explains that one reason for the decision to relocate the trading engine to Johannesburg was the increased operational stability that this move would offer. “The handful of incidents that we have had requiring the equity market to be halted, have been related to our international connectivity links. Clearly these have had reputational impacts. By moving the engine to Johannesburg, we eliminate this problem and are able to offer our clients improved service availability and stability.”
MillenniumIT, which has over a decade of experience in building technology solutions for the capital markets, is a wholly-owned subsidiary of the London Stock Exchange Group (LSEG) and is based in Sri Lanka. Millennium Exchange is the company’s flagship product with 14 installations live worldwide (excluding the JSE) and is known for its speed and scalability.
“We are very pleased that Millennium Exchange is now live at JSE, South Africa’s only full service securities exchange. Millennium Exchange is a highly flexible and scalable next generation trading platform that offers ultra-fast order processing capabilities. This will enable JSE to increase its trading volumes at low cost and provide its customers with an unbeatable trading experience in terms of speed, efficiency and technology,” comments MillenniumIT CEO and LSEG Global Development Director Tony Weeresinghe.
Speed is becoming increasingly important in the exchange industry as exchanges cope with the rapid rise of automated trading. Those exchanges that have trading systems with the lowest latency – the time between when an order is received, processed and acknowledgement sent – will retain and grow market share.
In future, the JSE will manage and operate the trading engine itself. This allows the JSE to grow trading volumes and contain trading software costs.
The move of the trading system to Johannesburg has been welcomed by market participants.
“The MillenniumIT system is the way forward and puts SA on par globally with multiple other markets. It will not only be faster but given the broader global user base it should be easier to support and for new users to integrate it into their platforms. The JSE handled the migration well, with no deadlines being missed – it is today (2) and we are going live,” says UBS South Africa Head of Equities John Slettevold.
“The migration was handled professionally with all firms participating in the testing phases over the last few months to ensure that the system delivers as well as integration into downstream internal systems,” says Afrifocus CEO Ashvin Mancha.
“It was really an important step to bring the trading engine back to South Africa as it allows us to have control of our own trading engines and the system will be much faster. Location and speed is everything and we could only but benefit by having it right here,” says Navigare Director Erica Bruce.