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In this market, speed is key – and that’s why connectivity has become such an important focus for so many business, like CFH.
For CFH Clearing, it made perfect sense to move its matching, order and execution system to LD4 in Slough, where the majority of our liquidity providers are based and in close range of our London-based clients. It’s been a huge investment and has taken almost a year to finish, but it’s already proving to be worth it.
Our internal system latency to all major liquidity providers has reduced from 14ms to below 1ms for providers hosted inside LD4. We have also eliminated any disruption from line disturbance – such as during maintenance. Clients co-hosting in LD4 can get ultra-low latency with us now and can reap the benefits in terms of costs and efficiency.
It all sounds simple but, in fact, it’s highly complex. We have always been strong on our network management – and our previous servers, hosted in Copenhagen, ran effectively – we just knew that we couldn’t reduce latency any more if we retained them in-house. Hosting in LD4 was the logical option.
When we looked at connectivity issues in other parts of the world, we faced much bigger challenges. The Far East is a big market for us and we were getting an increasing number of complaints from clients in Southern China, Hong Kong, Shang Hai and Guang Sho about the quality of the connections. Sometimes the lines were so bad that we experienced up to 4 seconds latency. Typically, the latency was around 350-400 ms but it was very unreliable.
Routing was also an issue – and we would see asymmetric routing where one leg was passing through a US provider – such as:
Copenhagen – Amsterdam -L.A. (US) – Hong Kong
Hong Kong – London – Copenhagen
But that was just the tip of the iceberg. We had feedback from Chinese cities where some providers could not even resolve our DNS names, so not only were our websites not there, but also our trading systems could not do any connections. What was frustrating was that in the same city, this issue could be with one ISP but not with another. We suspected our registrant, GoDaddy to be the issue.
Another critical issue was the quality of the internet between China and Europe. Loss of data packages seriously hurt your applications when the latency exceeds 400ms, resulting in a very poor user experience.
Further digging into the Chinese internet situation showed clearly that even though they have all the new technology in the world, the co-operation (peering) between providers and the connectivity to providers outside China was not nearly as mature as the structure we are used to in Europe and the US, where all providers give you more or less the same experience. In addition, adding ‘The Great Firewall’, a gigantic government filter surrounding China with only a few access points to Europe, did not help on latency.
Our focus on improving the situation for our clients has been a real journey! We wanted to improve the internet experience for our Asian customers, without giving each of them private lines.
Our first move was to step up on DNS and contract a highly professional company with the right technology around the world. This has been in place since December and all our DNS issues have been resolved.
The next step was to partner with China Unicom and add a dedicated fibre to our BGP routed network, providing a shortcut between London and the China Unicom Beijing hub for all our clients. Initial measurements on the line show good latency below 200ms to central areas in China. Once clients are on our new highway, there should be no packet loss or fluctuations in the quality.
As China is a non-free market economy, I’d certainly say that the biggest challenges we faced were to get the information needed to make the right decisions. It has been impossible for us to get any knowledge about the Great Firewall system, and also knowledge about network peering, capacity, routing and availability in China has been a challenge to understand fully.
However, we have hopefully overcome these challenges and time will show whether we need further investment to reach our goal to bring high quality infrastructure between China and the UK FX market.
Retail brokers in South Asia and their clients will reap the benefits of our new infrastructure – no special set-up is required for them to benefit from the better quality lines we have set up.
If I look at the connectivity to and inside China moving forward, then I’m certain that the smart Chinese industry will get it all right in time, and we can then decommission these effective but also expensive internet improvements. But until that happens, we will no doubt continue to face some challenges when providing high quality internet services to the Chinese people, and we will try to address these as best as we can.