Russell Indexes is switching to NYSE Euronext for distribution and hosting of its RussellTick feed, which supports the Russell family of global indexes.
The arrangement will give Russell a broader global reach and enable it to offer a lower latency service for high frequency traders and large institutions, as well, the companies said.
The two firms also plan to develop index-based options based on the Russell U.S. and global indexes
RussellTick, created two years ago in a partnership with Nasdaq OMX Group, was previously distributed via Nasdaq’s network.
The index provider is switching to NYSE Euronext because of the greater global reach of the Secure Financial Transaction Infrastructure (SFTI) network, said Ariel Rastatter, director of real-time data product for Russell Indexe
“Russell has a very large presence in the institutional community in the U.S. and we wanted to do more outreach on the global side,” he said. “SFTI has a very large global presence and tapping into NYSE’s liquidity centers was very appealing to us.”
Russell Indexes to locate its hardware in NYSE Euronext’s U.S. Liquidity Center in Mahwah, N.J. NYSE Technologies will provide hosting and support services, he said. Russell will continue to use Nasdaq’s Closing Cross each year to complete the Russell Indexes reconstitution, he said.
Switching over distribution to SFTI will require only Internet address changes rather than application development work for clients because all of Russell’s direct connect clients are already on the SFTI network taking the NYSE Global Index Feed, Rastatter said. “That made the decision easier.”
A spokesman for Nasdaq said, “Nasdaq and Russell continue to enjoy valuable and collaborative relationships such as the closing cross for the annual Russell reconstitution. Nasdaq understands Russell’s decision and looks forward to working with Russell on other endeavors in the future.”
Russell Indexes plans to offer a server co-location service in NYSE’s Mahwah data center in the first half of this year, Rastatter said. This will allow high frequency trading firms to locate next to both the Russell calculation engine and a consolidated tape engine, he said. The co-location arrangement will allow clients to get “to our solution much quicker because of the proximity benefit,” Rastatter said.
“This partnership allows us to expand more on the technology side as well, in particular maybe catering a bit more to co-located clients and high-frequency traders by offering different versions of RussellTick or even expanding the offerings on RussellTick,” Rastatter said. “That could include a low latency version of RussellTick and adding content such as constituent data and corporate actions,” he said.
