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Tags: MiFID II

Last week the Financial Times featured an article that the Intercontinental Exchange (ICE) is going to use an atomic clock to timestamp its European futures trades.

The time will be taken from UKs National Physical Laboratory, which provides an extraordinarily precise means of timekeeping with a deviation of just one second in 158 million years! This initiative is designed to create greater control for firms dealing on the exchange in order to accurately reconcile their trades given the high frequency nature of the market – a key requirement of the MiFID II regulation that is due to come into force in January, 2018.

While there are numerous ways an automated system can identify and reconcile trades, a timestamp with an accuracy of within 100 microseconds as set out by RTS 25 is intended to eliminate the risk of falsely matching similar looking trades, especially for high frequency traders.

The obligation to synchronise clocks has rightly been identified by MiFID firms as a budget item on the critical path to compliance. The introduction of the atomic clock at ICE neatly demonstrates how unique timestamping requires new technology capability by all involved.

There are a raft of 3rd party providers who can bolt on clock synchronisation to existing trading systems to mirror the highly accurate timestamps used by exchanges. The challenge therefore becomes the merging of the trade and time data into a singular record and then reconciling it.

AutoRek has the ability to ingest and merge multiple data sets to create a complete record and then reconcile the trade using its high volume and high speed matching rules engine. So, with only 232 days, 15 hours, 0 minutes and 1 second (as of publication) now is the time to contact us at AutoRek to see how we can help you build a robust control framework and reduce the financial burden of implementing MiFID II.