Dr. Jock Percy, CEO of Perseus Telecom looks at precision trading across global market-to-market trading architecture.
Today the main communication linkage between the US’s master government clock in Colorado with companies’ clocks and servers distributed hundreds or thousands of miles away, connect through a broadcast of GPS data. The time it takes to transmit data from the NIST UTC clock to the site of most financial markets in Chicago, New York, Boston and Washington DC is about 500 milliseconds Round Trip Delay (RTD).
GPS communications transmit time data in different protocols than telecommunications protocols used in Local Area Networks (LAN) and Wide Area Networks (WAN) such as IP Internet Protocol at Layer-3 or Ethernet at Layer-2. GPS data must be translated to a networkable time protocol such as the widely utilized NTP – Network Time Protocol NTP. Since the source of time is translated, transported, translated again, networked and then recognized by a system’s operating system, many local enterprise clocks experience unpredictable drift, jitter or delay in receiving accurate time and thus throttle expectations to account for drift.
PTP – Precision Time Protocol
In a fast paced environment where communications continue to evolve, so does the need to transmit data have to evolve and keep up with higher demands on performance and latency. PTP as defined by the IEEE1588 standard offers the highest precision of time synchronization over ethernet networking. Ethernet is now an industry standard for LAN networking and ultra low latency connectivity across an enterprise architecture.
As the exchanges and members adopt a more precise, consistent, legal and standardised source of time there will be fewer disagreements because of the absence of discrepancies between parties timed events.
Regulatory reporting and audit review of activities will also be made more simple because with more accurate time stamps participants are subscribing to a time stamp service that is already certified and attested to as legal time.