Stepping Up Stock Market Speed by NI Chambers

As Chief Operating Officer in Europe of financial technology firm SR Labs he is responsible for overseeing the provision of high speed electronic trading technology for clients around the world from the firm’s offices in Belfast.

The company, which employs 107 people in Belfast and 75 across New York, Manila, Pune and Chicago, develops software and services for the investment banking sector. The company’s flagship products connect investment banks and hedge funds to different stock markets and trading venues around the world. Their technology is focused around electronic trading and the use of high-end software to process orders, along with a range of services to reduce complexity and costs for its user base.

SR Labs, which is headquartered in New York in offices just off Wall Street, has around 150 clients counting the biggest global names in finance among them. The operation in Belfast deals with at least 250 different markets including equities, derivatives, foreign exchange and fixed income, along with all functions of the company from sales through to software development.

“Over the last 15 years, much of financial trading has moved away from having hundreds of buyers and sellers on the floor of a stock market. Large percentages of trading is now completed electronically, with that trend continuing with recent regulation seeking to drive more trading onto electronic platforms. These changes have brought all types of technology advancements and opportunities for firms such as ours,” says Ian.

SR Labs is part of a growing industry dedicated to providing software and services to facilitate outsourcing of trading infrastructure for financial firms. Stock exchanges can now execute trades in less than a millionth of a second - more than a million times faster than the human mind can make a decision. Many financial firms deploy sophisticated software to battle for millions of small fractions of profit. The programs exploit minute movements and patterns in the markets, often replicating their behaviour millions of times to generate a return.

“For some clients, trading in certain asset classes is now about the amount of microseconds it takes to get stock bought and sold,” says Ian.

“Each stock exchange sends out ‘market data’ which contains all of the prices and surrounding information for the tens of thousands of stock being traded, along with all of the various other more sophisticated tradable products available in other asset classes. These prices are moving constantly, driven by all of the activity in the market between buyers and sellers. The amount of data which is sent out is vast – many millions of updates per second. The software we develop not only has to be highly performant to process all of that information but it has to do it in as fast a way as possible, using as little hardware as possible. It is not surprising that many firms choose to outsource this kind of technical challenge.”

SR Labs began life as a small start-up firm in New York, but has grown substantially over the last 5 years. The company established itself in Belfast two years ago following its acquisition of the ‘Wombat’ business, which spun out of the New York Stock Exchange (NYSE), which had a major presence in Belfast up until late 2014. The current SR Labs operation in Belfast initially grew out of the local success story Wombat Financial Software – where Ian had started his career – which NYSE bought in 2008 for around $200 million USD.

“Wombat was a massive success story and I am proud to have been a part of it,” says Ian. The experience gave me a platform to build my career, and importantly has been pioneering for the local economy with the likes of Fidessa, CME, Hanweck, Options IT, and numerous other companies in our industry setting up similar operations in Belfast.

“It was quite a change back then in 2008 to go from being part of a successful small company, to being consumed into a monster organisation like the NYSE. Spinning the Wombat business back out of the NYSE has been liberating in many ways, and it certainly feels more natural to be back in a small company with an entrepreneurial mindset.”

With the upcoming changes in regulation along with the continued trend for clients in financial services to outsource trading infrastructure, Ian says he expects over the next 5 years for SR Labs to continue its growth.

“Our aim for SR Labs is to move to the next phase of our growth in 2016. We have expanded our headcount significantly in the past 12 months as we seek to capitalise on opportunities to expand our product lines and enter some new markets. We have ambitious investors and a great team – 2016 should be an exciting year to be part of SR Labs in Belfast.”