Cogeco Data Services Inc. has announced an alterative stock trading system is using its Toronto fibre network to execute transactions in less than a thousandth of a second.
Alpha Trading Systems Ltd., which is not a stock exchange per se but allows investors to trade securities online, is preparing its secure consolidated network infrastructure (SCNI) for launch before the end of March.
It will initially entail two redundant links between Alpha’s data centre downtown and a trading centre in the north end of Toronto, said Karl Ottywill, Alpha Group’s chief information officer.
“Once you’re on the network you can access different marketplaces on the network,” Ottywill said. He added the company plans to announce the cost later.
Alpha Group is comprised of Alpha ATS LP and Alpha Trading Systems. Alpha Group’s data centre is currently provided by Q9 Networks Inc. of Toronto.
Cogeco Data Services, which provides Internet access, metropolitan Ethernet and managed services using 500 km of fibre, is formerly known as Toronto Hydro Telecom. Cogeco Cable Inc. bought Toronto Hydro Telecom from the city in 2008.
Alpha Group was formed in May, 2007 by eight brokerage firms, plus the Canada Pension Plan Investment Board, who wanted an efficient method of trading securities.
“Guaranteed bandwidth is popular for the financial services sector,” said Virginia Brailey, Cogeco Data Services’ vice-president of marketing. She added banking and investment companies are looking for “real time data transmission” and Cogeco Data Services has service level agreements stipulating they must enable transactions will take place in less than a millisecond.
Ottywill said Alpha Group selected Cogeco Data Services on the basis of cost, performance of the network and resiliency.
“When you deal with Cogeco Data Services, you know it’s fully controlled by Cogeco Data Services,” he said. “It’s their own fibre.”
Alpha Trading Systems lets investors place orders using its Trade Through Management system. It also gives customers market information, such as bid and ask prices, trading volume and public order information.
“We don’t have exchange status (but) you can think of us acting as the way the TSX would,” Ottywill said.
Although Cogeco Data Services has customers in banking and broadcasting, it also provides service to the public sector.
Last October, the City of Toronto announced it awarded two ten-year telecom contracts to Cogeco Data Services. Under the terms of one contract, the city will pay $20 million for one gigabit per second (Gbps) to its offices and for 20 Gbps to its data centres. In a separate contract, the city is paying $19 million for similar services to independent agencies, boards and commissions, including the Toronto Transit Commission.
In late 2008, Cogeco Data Services announced a contract to provide a wide-area network to the Toronto District School Board. By next year, the company plans to connect about 600 locations to a 1 Gbps network, and provide a 40 Gbps connection to the school board data centre.