Securities Industry Automation Corporation, a subsidiary of NYSE Euronext, provides technical services for major securities markets, including operating stock market and options trading systems. It also operates technology for the Consolidated Tape Association and the Options Price Information Authority, facing challenges of security, reliability, and low latency levels.
Securities Industry Automation Corporation is the company that provides technical services for several major securities markets. It is a subsidiary of NYSE Euronext, which owns the markets. His job includes operating the stock market and options trading and reporting systems.
Created in 1972, the Securities Industry Automation Corporation was originally jointly owned by the New York Stock Exchange (NYSE) and the American Stock Exchange (AMEX). NYSE owned a two-thirds stake and AMEX a third, until 2006, when what was now called NYSE Euronext bought out AMEX’s stake. NYSE now operates the New York Stock Exchange and Euronext, a pan-European stock exchange.
Securities Industry Automation Corporation’s primary role is as a technology provider to the Consolidated Tape Association. This is the organization that runs the Tape Consolidated System, which electronically reports details of the latest stock sales and transactions on the relevant exchanges. It also runs the Consolidated Quotation System, which reports stock quotes offered by traders and requests from traders to buy shares. Nasdaq then processes and publishes this data, which is how most traders access the data.
Another function of the Securities Industry Automation Corporation is to operate technology for the Options Price Information Authority. This is the organization that provides both sales data and quotes for markets in options trading. This involves considerably more data than with standard stocks, known as stock trading. Between 2005 and 2008, the amount of data reported by the system increased more than 10-fold, primarily due to changes that allowed merchants to set prices to the exact cent instead of, as previously, in five-cent increments.
There are a wide range of specific technical challenges that Securities Industry Automation Corporation faces. One is security: only authorized users should be able to access group data identifiers. This is partly to protect the benefit offered to subscribers of the relevant services, but also to prevent potential fraud.
Another challenge is reliability. The corporation must ensure that the data is constantly available and up to date for programming. Failure to do this could potentially put trading on hold, causing serious financial damage to traders and investors. Systems must also have low latency levels. This means that there is the least possible delay between data being sent and data being received.
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