Tokyo Stock Exchange (TSE) plans to have its system shifted to the next generation system in the latter half of 2009.
The shift to the next generation system at the TSE has two important implications in general.
The first is a complete renewal of the system as a countermeasure to failures caused by the inadequate processing capacity of the present system, as exemplified by the incident that occurred at the TSE in early 2006 in which securities trading was temporarily suspended due to a sudden burden on the system.
The second is a complete renewal of the system to secure the advantages of processing at a higher speed against the growing threats from newly-emerging markets and online stock exchanges amid the accelerated reorganization of stock exchanges globally.
It is said that demand from investors and securities companies has drastically changed in recent years, and they have come to choose markets by the processing speed of orders rather than by secured execution. Like stock exchanges such as the London Stock Exchange and New York Stock Exchange that are ahead of others with regard to system renewal projects, TSE intends to innovate its stock trading system by establishing as one of the major purposes the securing of the advantage of its market through faster processing of trade orders and delivery of market information.
Presently, the securities market is facing accelerated trends in environmental changes including globalization and faster processing of trading orders through systems as represented by algorithm trading (automatic transaction through computers). Accordingly, the challenges on the system have been changing from reinforcement and expansion of system foundations to the pursuit of low latency* and throughputs*.
Securities companies are studying fundamental changes to their internal infrastructures for connections with stock exchanges that are about to realize faster processing speeds.
*Latency: Lag time for processing the distribution of date units. In this case, the lost time and lag time until securities transactions are reflected in market information.
*Throughput: A scale for messaging speed and processing capacity. Processing capacity and data transfer amount per time unit in messaging or processing.
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