It is often said that technology is what differentiates one stock exchange from another. And no exchange wants to be labelled as one with questionable system. So when NSE saw a flash crash last week, BSE was quick to say that its systems were working fine and there was no technical issue. Narendra Ahlawat, chief technology officer of MCX Stock Exchange (MCX-SX), which will soon compete with NSE and BSE in the equities segment, tells Ashish Rukhaiyar that their technology will not only bring down the trading costs but also allow scalability as and when required.
What can market participants expect from MCX-SX on the technology front in equities and other segments?
MCX-SX has already proved its prominence in the currency futures space. Our technology is low-cost, efficient and highly scalable and has been designed with an architecture that supports parallel processing and dynamic load balancing. Hence, it enables us to accommodate excess load scenarios by mirroring capacities as and when it is required.
What does this mean for an investor? Can he save on costs?
We have designed our technology in a way to avoid creation of excess capacity, which otherwise would add to cost per transaction of customers. MCX-SX does not use the monolithic system architecture like other Indian exchanges, as it is not cost effective. This assumes significance in India where cost per trade is one of the key decision-making factors for market participants while selecting an exchange to trade. Some Indian bourses use technology architecture based on the monolithic mainframe platform that is tantamount to housing a ?white elephant?.
How would you rate your technology vis-a-vis NSE, which is currently the market leader in equities and derivatives. Recent reports said that NSE has attained ?nirvana? in technology with speed close to the ?speed of light??
We would like to focus on stating facts about our technology offerings and avoid marketing gimmicks. When one attains nirvana, there is a sense of contentment and hence the belief that there is no scope for improvement. Change is the only constant in life and more so when it comes to technology, which is an innovative field. We empower our customers with the latest and most efficient technology.
Does your association with Financial Technologies also help in maintenance and up-gradation of your technology platform?
Financial Technologies (India) (FTIL) is our technology provider. They take care of the trading technology needs of MCX (India) and five international exchanges, which run for about 14 hours to 17.5 hours daily. This is about thrice the trading duration of any equity exchange in India. Just to put things in perspective, MCX offers settlement on T+1 basis and it is open till almost midnight and completes its settlement next morning before any other exchanges do. The exchange technology of FTIL is horizontally scalable and provides trading with ultra-low latency. FTIL believes that technology should provide ?market for all? and not focus on a particular class of traders. Its flagship product in brokerage solutions ? ODINTM – continues to be ranked as the number one front-end electronic trading platform with over 80% market share in India.