Smartgateways, a new generation of clearing gateways for derivatives

Even if trading volumes of listed derivatives are lower than they were a year ago, financial institutions trading futures & options still have to manage sometimes significant volume spikes. SunGard Global Trading has launched a new generation of scalable clearing gateways to handle these high volumes better and also take advantage of a new set of APIs recently released by several exchanges.

It has become essential that clearing gateways are designed to handle the frequent changes in connectivity. Many of SunGard’s post-trade derivatives applications rely on market connectivity and the complexity of the issue is increased because some clients are using clearing gateways in a pure API mode. So the fact that many exchanges now regularly upgrade their APIs has to be taken into careful consideration: clearing gateways needed to be rebuilt with a new set of guidelines.

Smartgateways have been designed to provide high performances and scalability; their architecture are ready and able to cope with high volumes, whether these are spikes or sustained over a prolonged period. And to ease the burden, multiple gateways can be installed for a single exchange.

The Smartgateways have been rewritten in Java and are based on standard industry frameworks, such as FIX messages over a JMS bus. This makes it easier to integrate them with other applications.
Smartgateways can be run on multiple platforms such as Linux, Unix and Windows. It is also possible to add a new Smartgateway to a production environment in real-time without stopping it.

SunGard’s GL Clearvision, a leading derivatives industry solution for matching and clearing, has on-boarded the first Smartgateway, Nyse-Liffe US (cleared by the OCC). This is now live with four US clients. SunGard’s roadmap is due to be completed by the beginning of 2010, which will see the company fully replace its 30+ existing clearing gateways. This will lead to the progressive integration of Smartgateways within all SunGard post-trade derivatives systems, such as GL Ubix, GL OptionWatch and GMI. This will unify the technology used to connect to any clearing platform in the world.

Further developments will also be made to add unique features to Smartgateways. Key Process Indicators will be introduced to provide day-to-day monitoring of exchange connectivity and activity, as well as medium-term indicators with comparison against benchmarks, allowing customers to proactively plan for capacity.