TSE Launches Next-Generation "arrowhead" Trading System

Fujitsu Limited and Tokyo Stock Exchange Group, Inc. (TSE) today announced the launch of "arrowhead", the TSE's next-generation trading system developed in collaboration with Fujitsu.

"arrowhead" was designed to greatly accelerate the TSE's order response and information distribution speeds. With transaction information, such as orders, contracts, and order books, being processed on triply redundant servers, the system achieves both high speed and high reliability, placing it among the world's most advanced securities trading systems.

A broad spectrum of market participants will benefit from the increased convenience of the new system. Furthermore, the system will enable new trading styles and business models, which will bring a new level of dynamism to Tokyo's stock market.

Background

The advances in finance industry technology over the past several years have led to an expansion in the types of trading activity, with individual investors increasingly trading online, and securities companies and institutional investors employing algorithm-based program trading and other types of trading methods. With the form of trading changing, there has been a need for greater speed in order execution and the distribution of market information.

To respond to this need and enhance the global competitiveness of Tokyo's exchange, Fujitsu and the TSE entered into a wide-ranging collaboration. In order to accommodate the feedback from securities companies, information vendors, individual investors and institutional investors, as well as meet the trends among global stock exchanges, the TSE decided to launch a next-generation trading system called "arrowhead", with an emphasis on speed, reliability, scalability, and transparency. The new system began operation today.

Overview of "arrowhead"

1. Speed: Enabling millisecond-level market access
   "arrowhead" achieves an order execution time of 5 milliseconds (one-thousandth of a second) and distributes information in 3 milliseconds. By bringing millisecond-level speeds to both transactions and market-information distribution, the new trading system allows market participants to observe and act on fast-moving market trends, and brings about increased liquidity and new styles of trading.
2. Reliability: Applying the latest technology to ensure market reliability
   "arrowhead" processes transaction information (orders, contracts, order books) on triply redundant servers. This results in not only world-class speed but also bedrock reliability for global market traders accessing Tokyo's exchange.
   In addition, the construction of a secondary site (backup center) will enable recovery in less than 24 hours following a large-scale disaster.
3. Scalability: Providing a stable trading service with abundant capacity
   To ensure sufficient capacity and provide a stable trading service, "arrowhead" is designed with double the capacity needed for peak volumes. The capacity can be further expanded within one week if necessary. The new system began operation with a capacity equal to four times the past peak volume.
4. Transparency: Increasing market transparency by significantly expanding market data
   With "arrowhead", FLEX Standard, which handles multiple quote feeds, is expanded from five to eight quotes. Moreover, the new FLEX Full is being added, which distributes all order information on all issues in real time. This makes it possible for all market participants, including individual investors, to benefit from real-time access to all order and quote data.
   
   In conjunction with the launch of "arrowhead", the TSE has introduced sequential trade quotes, implemented revisions to bid/offer price limits and special quote renewal price intervals, as well as order-matching conditions in itayose call auctions, all of which are designed to promote smoother transactions and increase liquidity.
5. Innovation: Advanced technologies that underpin "arrowhead"
   To achieve the millisecond-level market access needed for a world-class trading system required a high-performance, high-reliability mission-critical system running on a massive server system.
   
   This system represented the crystallization of Fujitsu's many strengths. It was built on Fujitsu's PRIMEQUEST mission-critical IA servers and Linux, along with a combination of middleware with advanced technological features and functional enhancements.
   
   1. Ultra-high-speed data management software
      Newly developed, ultra-high-speed data management software with excellent reliability and scalability has been incorporated into this system.
      The new software boasts a number of advanced technologies. The software keeps transaction data resident in memory, which allows for ultra-high-speed data access on the order of microseconds (one-millionth of a second), and therefore high response performance and throughput. Because memory-resident transaction data are processed in parallel on triply redundant servers, if one server fails, the switchover to another server will occur in seconds without any data loss. Additionally, the system can be scaled out for expansion. Overall, the new software gives "arrowhead" the speed, reliability, and scalability it needs.
   2. Symfoware high-reliability database management software
      Symfoware, the high-reliability database management software for mission-critical systems, received functional enhancements which are incorporated into "arrowhead".
      Symfoware is designed to process massive volumes of data (over 14 million SQL instructions per minute) while maintaining database reliability. New enhancements give it the flexibility to handle even greater volumes of data (with load-sharing). By achieving a high level of scalability, Symfoware gives "arrowhead" the speed, reliability, and scalability it needs.

Overview of Hardware and Middleware in "arrowhead"