Thursday, February 26, 2009

Data Technical News #2009 - 6
NASDAQ Increases Bandwidth Recommendations for Proprietary Order, Quote and Trade Data Feeds

Why is NASDAQ increasing bandwidth recommendations for its proprietary data feeds?

NASDAQ^® is increasing its bandwidth recommendations to reflect traffic growth and systematic improvements in the market in recent months.

NASDAQ has recently implemented a number of systematic processing improvements that have increased its message throughput rates on the proprietary data feeds. In light of the volatile market conditions, NASDAQ participant firms have altered their trading patterns in recent months, which have lead to higher message peaks on NASDAQ’s proprietary data feeds at prime market times.

Given these systematic and market changes, NASDAQ is significantly increasing its bandwidth recommendations for TotalView-ITCH, TotalView-Aggregated and its other proprietary order and quote data feeds.

It should be noted that NASDAQ last updated the bandwidth recommendations for its proprietary order, quotation and trade data feeds in 2007.

What are NASDAQ’s new bandwidth recommendations for the proprietary data feeds?

For each data center connection, the revised bandwidth recommendations for the NASDAQ proprietary data feeds are:

For the TotalView-ITCH data feed, NASDAQ is increasing its bandwidth recommendations by 150%. Given that it is retiring the legacy TotalView-ITCH formats next month, NASDAQ has omitted the TotalView-ITCH 3.0, TotalView-ITCH 2.0a and TotalView-ITCH 2.0 data feeds from the chart above.

Please note that NASDAQ bandwidth recommendations are based on one-second peak message rates. Firms may wish to use a higher bandwidth allocation than the recommended amount if they are sensitive to sub-second data peaks.

When do NASDAQ’s new bandwidth recommendations go into effect?

NASDAQ bandwidth recommendations are effective immediately. NASDAQ is advising direct data feed subscribers to work with their connectivity providers to upgrade network capacity as quickly as possible.

It should be noted that NASDAQ does not throttle its TotalView-ITCH data feed product. As a result, direct TotalView-ITCH data feed subscribers with insufficient network capacity may be subject to data queues or data gapping during peak market periods.

What steps is NASDAQ taking to control network costs for direct data feed subscribers moving forward?

Today, NASDAQ offers a compressed SoupTCP data feed option for the TotalView-ITCH, TotalView-Aggregated, NASDAQ Level 2, NLS and QBBO data feed products. By selecting the compressed data feed option, firms can save up to 75% in network costs. Please refer to the NASDAQ compression specification for technical details.

As outlined in Data News #2009-10, NASDAQ is also planning to implement new Order Replace functionality on TotalView-ITCH 3.1 and TotalView-ITCH 4.0 customers in March of 2009. Over time, NASDAQ hopes that Order Replace functionality will reduce TotalView-ITCH message traffic rates by 40%.

Is NASDAQ planning to adjust the bandwidth allocations for the UTP data feeds?

Yes. In its role as a securities information processor, NASDAQ is also increasing the bandwidth allocation for the UTP Quotation Data Feed^SM (UQDF^SM) and UTP Trade Data Feed^SM (UTDF^SM) products. Please refer to UTP Vendor Alert #2009-2 for details.

Where can I find additional information on NASDAQ’s proprietary data feed products?

• Refer to the NASDAQ Market Data Specifications page on the NASDAQ OMX Trader^® website.
• Contact NASDAQ OMX Global Data Products at +1 301 978 5307.