The National Stock Exchange (NSE), India’s leading stock exchange, has selected the Raima Database Manager (RDM) Workgroup 12.0 in-memory database as a core element for future generations of its trading system front-end, the National Exchange for Automated Trading (NEAT).
An in-memory database stores all the data in the computer main memory for fast access and improved performance. The in-memory database benefits critical, high performance applications such as a trading system and its front-end by high speed processing of large volumes of transactions, thus providing the users and investors quick responses to their trading activity.
NSE has been using RDM for many years, and as a part of its efforts to develop the architecture for future generations of its trading system front-end, the exchange felt the need to upgrade its trading front-end to Raima’s RDM Workgroup 12.0 in-memory database and benefit from its latest high performance features.
“NSE needed a product with the performance to handle high volumes of data at its trading front-end, sometimes over 20,000,000 transactions per trading session, and the new architecture of RDM 12.0 helps manage this more effectively”, said Nigel Rozier, EMEA Sales Manager at Raima. NSE currently handles close to 500,000,000 messages per trading session at the trading host-end.
RDM version 12.0 is optimized for embedded, real-time, in-memory and mobile applications, delivering flexible and reliable solutions for collecting and storing large volumes of data, providing intuitive methods for managing and navigating through information quickly, and enabling data to be moved in real-time. It provides software developers with a wide variety of powerful programming tools and customizable building blocks that enable them to solve the most complex data management challenges.
The NEAT platform generates and maintains an audit trail of the orders entered in the system by assigning a unique order number to all the orders placed on the NEAT system.
Today, almost 100 percent of equity trading in India takes place through electronic order matching, and technology is extensively used to enable brokers and investors to carry out trading activity from far-flung areas through the internet. This has made a huge difference in terms of equal access to investors in a geographically vast country like India.
When an investor asks his broker to place a trading order, the broker executes the order through his computer, which sends a signal to a mainframe computer at NSE. A message related to the purchase order is sent to the sellers, and an order confirmation message is immediately displayed on the broker’s computer. If this order matches with an existing sale order, a message is sent to the seller. Otherwise, the purchase order waits for a sell order to enter the system.
This trading system operates on a strict price-time priority algorithm. All orders received on the system are sorted, and the best priced orders get matched first, i.e., the best buy orders gets matched with the best sell orders. Similarly priced orders are sorted on the time-priority basis, i.e. the orders that came in first gets priority. Orders are matched automatically by the system, using logic that is transparent and fair. When an order does not find a match, it remains in the system for the day till a fresh order comes in, or the earlier order is cancelled or modified.