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The bank will employ the CorvilNet latency management system to monitor, analyse and optimise its market data plants in New York and London, and the CorvilClear inter-party latency monitoring tool to measure the speed of its links to execution venues.
In particular, CorvilClear will allow Morgan Stanley to see where and why latency is occurring in the trading process and how to minimise it.

“Although we have our own proprietary systems to ensure latency is adequately measured and controlled within our trading platform, we are using CorvilClear to explore what happens beyond this in the execution venue space,” Kevin Twitchen, executive director, Morgan Stanley, told theTRADEnews.com. “The implementation of Corvil’s latency management products is the first step in working with exchanges, MTFs and third-party service providers to give us the required visibility.”

Morgan Stanley has been working with one multilateral trading facility to determine how best to measure latency between the bank’s firewall and the matching engines of trading venues. Twitchen said this will improve the bank’s understanding of the network providers that sit between it and the trading venues.
Using Corvil will also allow Morgan Stanley to ensure its electronic trading platform is fit for purpose and the ability to handle external factors that may add latency.

“The area of latency is open to interpretation,” said Twitchen. “There are ‘marketing’ numbers around latency and there are the ‘real’, end-to-end numbers. We are trying to establish the latter to help both buy- and sell-side market participants as well as our high-frequency clientele.”

“Latency compliance management and latency transparency within electronic trading infrastructure have become hot topics within high frequency trading. Unfortunately, demonstrating compliance to latency service level agreements and/or regulations is often made more difficult by not having the right technologies and tools in place,” added Corvil CEO Donal Byrne.