Celoxica Adds Risk to Data Accelerators

Low-latency, hardware-accelerated feed handler provider Celoxica has developed FPGA-based risk management components in preparation for the Nov. 31 implementation of the US Securities and Exchange Commission's Market Access Rule 15c3-5, which makes brokers apply pre-trade risk checks to any sponsored or direct access client trading flow, on top of its hardware-accelerated market data and order-routing capabilities.

The Accelerated In-line Risk (AIR) solution performs risk and limit checks on client orders as controlled by brokers, who embed a FPGA co-processor into trading servers in their co-location environment, thus reducing latency by eliminating unnecessary hops through which trades must pass, while also keeping costs down by not requiring separate servers for risk checks, says Celoxica president Lee Staines.

Brokers can run AIR as a standalone risk component, or in conjunction with its data and order-routing components. "We believe that, ultimately, the combination of our hardware-accelerated market data combined with hardware-accelerated execution and risk would be the optimal way of achieving maximum throughput. But we know that clients want to mix and match platforms, so we have tried to make each component deliver best performance on its own as well," Staines says.

The component was developed in-house, in partnership with an unnamed client that helped guide its requirements. Celoxica is initially targeting AIR at equity markets, though Staines says the vendor will extend it for futures and other asset classes where it could deliver benefits. In the meantime, he says the vendor is working with clients to ensure compliance by this week's deadline.