At a time in which exchanges and exchange technology providers are exploring options to take advantage of the scale and flexibility of the cloud, London challenger exchange Aquis Exchange PLC (AQX.L) has become the first of the recognised exchanges to achieve full migration of its matching engine to the cloud.
From this week all trades on its primary and secondary markets exchange, the Aquis Stock Exchange, are being matched and executed while running on Amazon Web Services. The matching engine is the core component used to determine trades.
Aquis’ move is part of a wider trend among exchanges to make use of technological changes and create next-generation technology infrastructure.
As part of this process most of the lead exchanges have been migrating components of their business into the cloud over the last two years. Nasdaq (Nasdaq: NDAQ) for instance migrated the core trading system of its options exchange Nasdaq MRX to Amazon Web Services (AWS) late last year.
Aquis, which has not only been set up as a challenger exchange to challenge the status quo, particularly in Europe, but also runs a technology and data division, has used its cutting edge technology to make strides ahead of competitors.
“Aquis has been a trailblazer in cloud deployment of exchange technology since 2020, when we first completed a proof of concept with AWS and the Singapore Exchange,” explained Adrian Ip, Managing Director of Aquis Technologies. “Since then, we have provided full cloud and hybrid solutions for several clients, as well as launching Aquis Equinox – the world’s first 24/7 matching engine.”
“It is a natural progression to look at the ways in which cloud technology can benefit our own exchanges, and it’s great to see Aquis Stock Exchange pave the way for other recognised investment exchanges,” Ip added.
Aquis’ CEO Alister Hayden said that the new technology profoundly changes the economics of running an exchange because, among other things, it provides the ability to survey a market and operate in microseconds in a very reliable way.
With this technology it is possible do more advanced things than ever before. The cloud-based approach allows scalability, which can be used for instance during spikes in trading volumes, and increased infrastructure for backup and failsafe purposes. It is also far more cost effective, allowing savings on staffing in physical locations, procurement of hardware and space and energy usage. It cuts down on the need for data centre-related energy use and reduces the exchange’s environmental footprint.
Challenging the status quo
The company’s model is obviously helping to fuel growth – particularly in this time of crisis when trading volumes are low and start up capital is difficult to raise. Despite this all of the company’s key divisions: equity trading, data division and technology, have posted double digit growth this year.
In ten short years since it was set up in London to challenge the status quo of an established equity trading environment Aquis has grown to become the seventh largest exchange group by volume. Trading on its platform covers over 2,000 major and mid-cap stocks across Europe and reaches just under EUR2 billion per day.
Technology developments like moving the matching engine onto the cloud will help keep it ahead of the pack.
