Neeraj KulshresthaChief Business OperationsBSE Ltd

Trading Technology Trends and Innovation

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Technology trends and Innovation

NEERAJ KULSHRESTHA

3

Other Investments

BSE GROUP

Exchange

BSE

100%

Equities/SLB Equity Derivatives Currency Derivatives Interest Rate

DerivativesMutual Funds/ETFsSME / ITPCorporate DebtListingData OFS FII Auctions G-sec

CDSLICCL

CCP CDP

54.2%

100%

ClearingSettlementRisk Management

DepositoryRecord KeepingCVLCIRL - Insurance

BSE Investments

Ltd.

100%

Strategic Investments

SERVICES

50%

100%

100%

Market Place

Technologies IT Service

MT Tech Infrastructure

BSE InstituteTraining

Certification BFSI BSE SL

Asia Index Pvt. Ltd.

50% JV with SPDJI

Index Business

BSE Sammaan

CSR LimitedCSR

Activities

100%

BSE CSR Integrate

d Foundatio

nCSR Activities

75%

3

4.99%

CSE

16.66%

NPEX

BSE Group – a complete Securities ecosystem

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BSE – some technology milestones

•Fastest trading technology with 6 micro response time

•Trading platform – Deutsche Borse T7 platform customised for Equity

•Provides Colocation and HFT•PTP synchronisation – Meinberg•500 K OPS•Network Latency 10 micros

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Key trends in Trading Technology

Social Media Mobile Apps Ultra HFT Hardware efficiency

Connectivity Cloud AI Big Data

Infrastructure consolidation E commerce DLT Cyber

security

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Technology trends

Social media for trading and analysis• People spend more time on social media • Integration of Social media with trading applications to accept orders, trade and Post trade

Mobile based rich apps• Mobile apps are already available for trading systems. • Richer applications to utilize the powerful CPU's and huge RAM's • Mobile applications will substitute desktops

FPGA based HFT's and FPGA based exchanges• Superior and cost effective technologies used in Defense sector • BSE order confirmation time of 6 microseconds is the fastest in the world - move to nano

seconds • Limitations to application based performance improvement• Extract performance developing code for hardware- FPGA's • FPGA - Offer flexibility of software and performance of hardware,

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Technology trends

100G connectivity• 100 G will offer unprecedented speed of communications• Will help provide latencies in nanoseconds / sub nanoseconds• Faster inter-process communications • Superior technologies like Infiniband will significantly reduce IPC

Cloud based exchanges• Scalability and extensibility with optimum use of infrastructure. • Private clouds to optimally utilize the bare metal infrastructure. • "Cloudification" of hardware goes a long way in scaling horizontally. Data and Cyber Security

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Technology trends

Infrastructure consolidation• “One-box exchange" model • Using shared memory communications, wires are completely eliminated. With efficient

use of NUMA and CPU sets, the processes are distributed over different cores and memory pools

Big Data and Analytics• Consolidation of data across multiple platforms bringing efficiency and lower cost of

ownership• Data Driven Enterprise - ability to analyse and act on information in near real time. • Real time surveillance and fraud detection models for Risk mitigation

E-Commerce• Competitors of Exchanges • Indian regulators allow purchase of mutual funds through e commerce platforms

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Technology trends

DLT• Technology under assessment• 5-10 year timeframe

AI• Machine learning

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BSE IT in 2009

Trader

BOLT / DTSS EQ Trading F&O Trading

RMS & Collateral (EQ)

COSS (CLS) - EQ

Sybase β3

ER

BOSS-i Datafeed Central DataWarehouse DRS

ReutersBloomberg

BSE Website

Clearing House System (CHS)

Banking System

IDBNon-trading related back-office operations

CMS

IMOPS

TWS 1

Post Trade

OnlineCollateralEQ Masters, SystemParameters

Orders, Inquiry,Broadcast

Online EQ /F&OTrade info &Market Picture

OnlineEQ/F&O Order info Trade info Market Picture

Online EQ/F&O Market Picture EOD FQ/F&O

Order & Trade info & MarketPicture

EOD EQTrade info

EOD F&OTrade info

EQ Security ObligationsF&O Security

Obligations

EQ Funds Obligations

F&O Funds Obligations

Online TradesIML

Internet

DLOAD

DUS

Extranet

FOW

COSS (CLS) - EQ

Banking System

Trading

Syste

ms

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Transformation• Complete revamp of trading system• Distributed Architecture for Vertical and Horizontal scalability• Brought down round trip latency from 40 millisecond to less

than 200 micros

Core Trading System

• Separated supporting functions from the trading system• Independent systems having real time integration with the

trading system. 50 + applicationsSupporting Functions

• Migration of Unix Based system to Windows and Linux Based• Migration and Consolidation of multiple Oracle and Sybase based

databases to SQL Database

Technology Migrations

• Complete underlying network changed to the state-of-art technology to handle high speed, scale and throughputNetwork Revamp

• Hadoop Cluster using Open Source Big Data technologies• Built up capacity of 320 TB• Migrated all MIS reporting and analytics to this framework

Data Warehouse

• PR of all application at P.J.Towers; real time DR• Near site Data Backup and resiliency• Automation of switchover

Site Consolidation

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BSE IT in 2016

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BSE Testing philosophy

Robust testingFaster time to marketStandard testing across applicationsEnsure all stakeholder participation

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Testing process

4 tier testing• Development• User Application Testing• Quality Assurance• Marketwide Mock

Testing environments• Development• UAT• Simulation – available to members 24x7 for testing patches• Internal Lab – for internal system and application testing and tuning• Algo Test Lab on cloud – members can test algo strategies

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Testing process

Testing tools• Load simulator • Automated testing

Type of testing• Black-box testing (functional)• Regression testing • Sanity testing • Negative testing • GUI testing

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Testing approach

Development team• Design document/ Implementation approach shared with UAT and QA teams • Knowledge transfer session conducted for UAT and QA teams

UAT and QA teams• Preparation of test plans, test scenarios, test cases• Observations/Defects reported in Reporting system Redmine• Review discussions of reported observations/defects with Dev team• Re-testing of observations once fixed by development team• Sign-off by both teams after completion of testing• One round of testing conducted in the production environment during mock trading

session

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QA Testing approach

• Agile methodology - reduces the testing and release to the market time• Test complete system v/s only the functions• Automated testing for the applications to do regression testing which

ensures complete coverage (Qualitia Product with underlining tool QTP and Selenium)

• Release Management tool like SVN ensures the correct code is migrated to the production setup

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THANK YOU