CFTC Eyes Rules for Low-Latency Colo

The Commodities Futures Trading Commission is considering new rules governing colocation services supporting high-frequency trading, which would reportedly include both exchange-operated colocation services and third-party vendors.

The Commodity Futures Trading Commission is considering new rules governing colocation services supporting high-frequency trading, according to Finextra. The CFTC says its proposed rule would ensure market participants would "have equal access to co-location and/or proximity hosting services without artificial barriers that act to exclude some market participants from accessing these services."

The proposed rules would reportedly include both exchange-operated colocation services and third-party vendors, and include oversight of fees to ensure equal access for all participants. (Note: We've searched the CFTC web site but are having trouble locating the proposed rule changes. If any readers have it, please share in the comments).

Low latency trading has become a big business for a number of players in the data center space, prompting an arms race between financial data centers in northern New Jersey, where the leading stock exchanges are increasingly competing with commercial colocation and hosting specialists like Equinix, Savvis and Switch & Data. NYSE Euronext is also building a large data center in New Jersey to expand its colocation space for traders.

For more on this topic, check out our High Frequency Trading Channel or see these resources:

TAGS: Networks
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