Credit Suisse, Turquoise Tap New Interparty Latency Measurement Tool

By Alexa Jaworski

Corvil announced today that Credit Suisse and pan-European trading platform Turquoise are using CorvilClear, a new system designed to let market participants and execution venues share information about the performance of their trading infrastructures.

Two other investment banks are currently using the software, according to Corvil, a provider of technology that measures latency in trading and market data systems. CorvilClear, says the Dublin-based company, lets interconnected parties agree to a level of transparency and exchange latency measurements without exposing proprietary data.

Yann L’Huillier, chief information officer at Turquoise, said in an interview that the new system “will give us the ability to see the response time and latency across the network. As an exchange or alternative platform, you want to compete on functionalities, on latency and speed, but you also want to bring something else to the plate and help the financial community trade better.”

“Speed and quality of trading is crucial for our members, and a lack of transparency in the execution process can undermine their trading strategies,” said L’Huillier in a statement, adding that with CorvilClear it can now “analyze latency across the entire network instead of individual components. Turquoise sees CorvilClear as an opportunity to develop the first latency-transparent market.” The London-based trading platform in the fall began using CorvilNet, which monitors, analyzes and optimizes the infrastructure performance.

While Corvil’s trading venue and financial firm customers have been able to optimize “what’s within their four walls,” said Corvil CEO Donal Byrne, the new platform lets them “do this end-to-end across the infrastructure of all parties involved in the trading loop.” Though the deployments to this point have been in Europe, Byrne noted that the technology is being tested in the U.S. as well.

Chris Marsh, head of European trading and product development for Credit Suisse’s Advanced Execution Services, which announced in June that it was using CorvilNet, called the technology a “novel means” of letting his firm “know exactly where and when latency is induced; this could be inside or outside our networks. We look forward to leveraging its benefits with more latency-transparent venues and providers.”

According to Byrne, Corvil was approached more than a year ago by a bank--which he declined to identify--that was trying to come up with an automated way to resolve latency issues it was having with a trading venue. “They were not able to measure the speed at which they were receiving market data, they were not able to see beyond the response time of their orders, there was no way that they could electronically collaborate with the parties,” he said. “It was both a technological challenge and a policy challenge,” which Corvil resolved through a system “that allowed the trading partners to pair with each other and agree to interchange their respective performance information.”

The company has seen “broad industry appeal for CorvilClear’s premise,” said Byrne. “Firms see it as a way to reduce risks, increase confidence and control costs associated with managing a low-latency trading infrastructure that is not totally under their control.”

CME Group said last month that it is using Corvil to monitor and manage latency in its trading and market data infrastructures. In February, Corvil announced that BT would begin offering its clients the CorvilNet platform.