Exchange says phased migration to Amazon Web Services will begin in 2022 with its US options market
Nasdaq’s ambition is to become “one hundred percent cloud-enabled,” the company’s chief executive Adena Friedman said Tuesday, announcing the move at an AWS industry conference in Las Vegas. “We will follow more of our markets as we work closely with customers,” Ms Friedman said.
Nasdaq has previously said that all of its 25-plus markets will be hosted in the cloud within the next decade.
These include six equity markets in North America, including the Nasdaq stock market, as well as six equity derivatives markets, the Nasdaq Baltic and Nasdaq Nordic markets, and the fixed income and commodity markets.
The financial-services sector has been slow to adopt cloud computing compared to other industries, which stemmed from tight regulatory oversight from banks and exchanges, as well as concerns over breaches of sensitive customer data.
“To the extent that they don’t alienate their trading partners and investors, moving to the cloud gives exchanges more flexibility, as well as enables more people to connect,” said Larry Taub, Head of Markets Structures. Enables people to connect easily.” Research in Businesshala Intelligence.
Earlier this month, CME Group Inc.
and alphabet Inc. NS
Google inked a deal to move CME’s core trading system to the cloud.
The Nasdaq already stores billions of transaction records in a data warehouse operated by AWS, including daily orders and quotes transmitted by merchants. Over the years, the company has moved many services to AWS, including its revenue management systems for the US and European markets. Its current relationship with AWS is a big reason Nasdaq said it chose the Amazon.com entity to host its markets.
“We’ve had a long relationship with them,” said Brad Peterson, Nasdaq’s chief technology and information officer.
Cloud systems and apps are hosted on data centers operated by third-party providers, including tech giants like Amazon.com, Microsoft Corporation
and Alphabet Inc.’s Google. The system enables users to rapidly scale on-demand computing needs with far more ease than in their own data centers.
Mr. Peterson credits cloud systems for preventing Nasdaq from suspending trading in January, when a frenzy for GameStop shares Corporation
And some other companies flooded popular online brokerages, increasing market volatility and forcing many operators to restrict access to trading.
He said moving markets to the cloud has the potential to give exchanges greater security, greater reliability and better scalability, or the ability to power computing resources quickly. Nasdaq and AWS can also create new cloud-based products and services for Nasdaq customers, Mr. Peterson said.
Scott Mullins, head of worldwide financial services business development at AWS, said Nasdaq’s growing use of cloud systems is driven by the need for elasticity and flexibility to handle market volatility, as well as the hundreds of billions of trading events held every day. “If you’re doing this on optimized hardware, you have to estimate what your capacity should be,” Mullins said.
The two companies have been working together to build on Nasdaq’s cloud-based capabilities since about 2012, Mullins said. “If you get a bill from Nasdaq today, it’s coming from the data lake sitting in AWS,” Mullins said.
“We’re just going to do it at a pace that works for us, AWS, and our customers,” said Tal Cohen, executive vice president and head of North American markets at Nasdaq.
Ms Friedman said the move was announced Tuesday by exchanges’ matching engines, systems that connect buyers and sellers and handle the large number of price quotes and trades submitted by high-speed trading firms, which exchanges K systems are accustomed to process order. millionth of a second.
In the first phase of the move, Nasdaq’s primary data center for the US equity and options markets will be expanded in Carteret, NJ, and AWS will establish computing resources there, Mr. Peterson said. Merchants will be allowed to connect their servers to AWS servers the same way they currently connect to Nasdaq’s servers, he said.