The National Physical Laboratory (NPL) will offer its precise time service, NPLTime, to colocation customers at Intercontinental Exchange’s data center in Basildon, UK.
As the UK’s National Measurement Institute, NPL is home to a cesium fountain clock, NPL CsF2, a primary frequency standard accurate to within one second in 158 million years. The system is directly traceable to Coordinated Universal Time (UTC), the primary time standard by which the world regulates clocks and time, and is independent of GPS.
Every millisecond counts
This level of temporal accuracy is targeted at financial markets, with milliseconds worth millions to high frequency trading algorithms.
“In today’s markets, timing is everything. High frequency trading represents around 30 percent of UK trades and 50 percent in the US - precise timing offers competitive advantage,” Dr Leon Lobo, strategic business development manager at NPL, said.
“Current systems rely on GPS which is vulnerable to jamming and other interferences and uses equipment that can be inaccurate. Timing issues have led to trading irregularities with the potential to disrupt markets.”
On 3 January 2018, the EU’s Markets in Financial Instruments Directive (MiFID II) comes into force, requiring financial organizations to achieve up to 100 microsecond level traceability of trading events.
“The new MiFID II regulation will set new standards for timing to prevent [disruptions], and organizations will be under pressure to comply,” Dr Lobo said.
“NPLTime not only helps to minimize the cost of regulatory compliance, but also helps make timing systems completely reliable and robust.”