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SIP to receive latency reduction... in 2017

First Published 22nd July 2016

Painting racing stripes on Securities Industry Processor to increase speed.

The Securities Industry Processor SIP, which is the official US Equities datafeed for the larger part of the US equity universe, is going to get upgraded. With racing stripes and everything. Not this year, but next year, but hey... big beasts have to move slowly.

The plan is to upgrade software, hardware and network components to achieve better performance. Specifically they are looking at:

  • For quotes (CQS): 10 million messages/s (currently 4 million messages/s)
  • For trades (CTS): 3 million messages/s (currently 1 million message/s)

The idea is not only to increase throughput, but also decrease the latency. This currently stands at about 240 microseconds by a factor of five: down to 50 microseconds.

The upgrade is slated for completion in 2017-Q2 for the quote side of the market and 2017-Q3 for the trade side.

Note that SIP only really handles part of the US equity universe, namely Tape A (NYSE) and Tape B (other exchanges except Nasdaq) securities. Nasdaq-listed Securities, also known as Tape C securities, have their own datafeeds operated by Nasdaq itself (called UQDF and UTDF for trades and quotes respectively).

Unfortunately FINRA was unable to comment whether the new switches were going to be painted red. Everyone knows that red switches switch faster.