Johannesburg Stock Exchange, the largest stock exchange in Africa, is launching a joint venture with market data vendor big xyt that aims to help other bourses make better use of their data.
The JV, called big xyt ecosystems, is the result of JSE’s efforts to make its wholesale data readily available to its local ecosystem of brokers, traders and investors, says Mark Randall, director of information services.
Like other bourses, JSE has invested in cloud architecture and front-end APIs and other ways to sell its data wholesale to industry players. “But this is about data analytics to facilitate trading,” he says of the new venture. “Not every sales trader or investor has the interfaces and the PhDs to integrate this data into their system. We put it on their desktop.”
Richard Hills, big xyt’s UK-based head of client engagement, says broker-dealers and other market participants rely on exchanges for critical information such as knowing their market ranking and market share – which can influence their liquidity and ability to transact with their own clients. Often they have to scrounge around across dozens of market venues to get this information, and then build a process to make sense of it.
With the JV’s product, called Trade Explorer, they could log in from their desk and get a current view from across all their venues, Hills says. “They can then feed this data into their trading algorithms.”
Leveraging JSE
JSE has been working with big xyt for about 18 months to develop this capability for the South African market. Trade Explorer is not meant to export JSE data to other markets, or create a single global hub for all this information. Rather, it’s meant to take the methodology that the partners developed and sell it to other exchanges, so they can make it easy to deliver their data to their own market participants.
“Other exchanges use us as a reference,” Randall said.
For big xyt, Trade Explorer is a continuation of its core business of selling data services to stock markets and other trading venues, which can range from setting up private cloud computing to more advanced data services.
“Exchanges are looking at their cloud strategy and how to deliver data in a commercial way to brokers and investors,” Hills said.
The partners say they are not trying to compete with established exchange-focused vendors such as Nasdaq and Millennium (part of LSEG), which provide matching engines for most of the world’s trading venues.
Randall also says JSE doesn’t expect its presence in the JV to be a barrier to sales – that other bourses won’t view it as a competitive threat.
“We compete for new issuance and for liquidity,” he said, “but there’s no value-add in each exchange building its own data-analytics system from scratch.”
