LimeInside customers already benefit from full pre-trade controls with added latency < 10 microseconds
Lime Brokerage LLC (www.limebrokerage.com), an independent high-volume agency broker and leading provider of high-throughput, lowlatency technologies to the professional trading community, congratulates the SEC for its decision today to ban the practice of unfiltered or ‘naked’ sponsored access in the U.S. markets.
Lime has been an outspoken proponent of such a rule, which is needed to limit the systemic risk that unchecked orders introduce into an increasingly high-speed marketplace. Throughout its 10 year history, Lime has never allowed naked sponsored access trading by its customers.
“LimeInside”, Lime’s exchange co-location solution, released in March 2010 and in active use by customers today, has been designed and implemented to meet the outlined regulatory criteria, including pre-trade risk validation requirements.
LimeInside’s trading server adds less than 10 microseconds of latency to an order while the total latency experienced by a trader from the moment they send an order to when it is received by an exchange gateway is less than 20 microseconds. This demonstrates that pre-trade risk controls can be implemented without compromising the strategies of even the most latency-sensitive traders, while still complying with the requirements of Rule 15c3-5.
Lime strongly supports the Commission’s decision which clarifies that monitoring risk solely through post-trade risk analysis via FIX drop-copies, espoused by some market participants, is not sufficient to avert the potential for systemic risk.
LimeInside’s architecture is designed to reside on a separate and distinct server from that of client systems, without an observable latency impact, thus complying with the Commission’s provision that risk controls be under the “exclusive and direct control” of the regulated broker. Solutions which combine client systems and broker risk controls onto one shared hardware platform will have difficulty complying with this standard, as the broker would lose “exclusive and direct control” of the server, compromising the Commission’s intent.
“The Commission’s decision today clearly demonstrates its thoroughness, leadership and vision on this critical issue and we’re excited to see that it validates the solution that we have already implemented which is consistent with the regulatory mandates without sacrificing performance,” states John Jacobs, Director of Operations at Lime Brokerage.