TSE’s new Arrowhead system slashes to five milliseconds the time needed to process orders, from two to three seconds previously. It will also enable the exchange to adapt quickly to smaller order volumes or sudden increases in the number of transactions, the bourse said on its Web site.
Proprietary trading systems, including so-called dark pools such as Liquidnet Inc., have been attracting asset managers with faster transactions and smaller price ticks. Liquidnet said it has almost doubled its Japanese clients to 111 institutional investors since it started local operations in June 2008.
Dark pools, which can make large anonymous trades, processed 1.2 percent of the nation’s stock transactions in 2008, according to market researcher Tabb Group LLC.
The upgrade may help restore the reputation of an exchange which last month was ordered to pay 10.7 billion yen ($115 million) in damages to Mizuho Securities Co. over its failure in December 2005 to cancel a faulty sell order. Six weeks earlier, system problems had shut down trading for more than four hours, while further glitches emerged during the following half year.
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- Tokyo Exchange Upgrades Trading System 4 Years After Shutdowns (businessweek.com)
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