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BSE takes on NSE in server co-location space

This article was posted on Feb 24, 2010 and is filed under Press Releases

Offers a rack for Rs 4.5 lakh per year as against NSE’s Rs 22.5 lakh.The Bombay Stock Exchange (BSE), following in the footsteps of its rival National Stock Exchange (NSE), is offering space on its premises to its members to co-locate their servers at almost one-fifth the price of NSE.

Co-location is like proximity hosting, except that the exchange hosts the subscriber’s server in its data center and helps in faster movement of data and execution of trades. The broker with his server next to the exchange engine gets a price feed updated every three-four milliseconds. A broker at a remote location will get the same every 30-40 milliseconds.

BSE is offering a single-rack space for Rs 4.5 lakh for a year, while NSE is selling it at Rs 22.5 lakh, said sources close to the development. Each rack can handle two-four servers. Each server can execute orders worth over Rs 200 crore daily.

BSE’s move to provide co-location facilities to its members is being seen as an attempt to revive its derivatives segment. While those taking co-location facilities with NSE can trade only on that exchange, BSE will allow its members to trade on other exchanges. It is also setting up a data center for co-location of servers in collaboration with Netmagic Solutions.

“The broker who has an office in Delhi and has taken a co-location facility with BSE will be able to trade on NSE or any other exchange. This will save him crucial seconds as BSE’s trading engine is closer to NSE’s servers, than the brokers’ offices in Delhi. Further, it will help BSE generate good volumes,” said a source close to the developments.

However, BSE has 60-70 racks compared to NSE’s 200. NSE has already allotted space to 60 members. Average daily derivatives volume is around Rs 70,000 crore on NSE, while it is quite negligible on BSE.

source: Business-Standard

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