Optimizing Compliance, Power Efficiency in Financial Services Networks

Network Time Solutions for Financial Regulatory Compliance

Accurate and precise time stamping is required for compliance with financial regulatory mandates such as the Sarbanes-Oxley Act of 2002 (SOX), the FTC’s Gramm-Leach-Bliley Act (GLBA), FINRA’s Order Audit Trail System (OATS) and the Payment Card Industry Data Security Standard (PCI-DSS). In fact, the 2015 European Securities and Markets Authority MiFID II regulations on clock accuracy and granularity in stock trading requires select trading venues to improve order time stamp accuracy to 100 microseconds to UTC with a granularity of 1 microsecond. Microsecond-level time stamp accuracy will be the norm. 

New Time Stamping Benchmark: What is MiFID II?

In Europe, Article 50 of the EU’s MiFID II required that “ESMA shall develop draft regulatory technical standards to specify the level of accuracy” of business clocks. ESMA met that goal on July 6, 2016 when it published its Regulatory Technical and Implementing Standards—Annex I. Within that document (RTS 25), ESMA regulated a technical standard on clock synchronization, mandating Coordinated Universal Time (UTC) as the official time reference for trading systems.

Taking effect as of January 3, 2018, MiFID II’s RTS 25 mandates:

• Trading venue operators and their members or participants shall establish a system of traceability to UTC.
• They shall be able to demonstrate traceability to UTC by documenting the system design, function, and specifications.
• They shall be able to identify the exact point at which a time stamp is applied and demonstrate that the point within the system where the time stamp is applied remains consistent.
• Reference time may be UTC disseminated by a satellite system, if any offset from UTC is accounted for and removed from the time stamp.

However, this regulation affects more than just European financial markets. Why the MiFID II directive matters globally is that any investment firms transacting with European-based financial institutions must also comply with the new clock synchronization requirements, which will be a challenge for some market participants.

Clock Synchronization for Financial Markets

Tailored to banks, hedge funds, trading firms and stock exchanges involved in high-speed, low-latency trading, Microsemi provides an ultra-precise end-to-end IP timing synchronization solution at the application layer that far exceeds sub-100 microsecond level accuracy to UTC with 1 microsecond granularity. Microsemi SyncServer® Network Time Servers and bus card products improve time stamp accuracy on archived data, making it possible to optimize algorithms to a higher level of synchronization to improve trading risk management and performance monitoring.

Increasing Security & Accessibility

Security and accessibility will always be top priorities of any financial institution. Microsemi's PoE midspans can improve security through device scheduling -- automatically powering down Ethernet devices during periods of non-use preventing possible unauthorized access. Further, connecting critical powered devices to a midspan operating on the PowerView Pro power management platform allows remote reboot for increased reliability -- increasing the effectiveness and efficiency of financial institutions.

Financial systems also rely on GPS-delivered position, navigation and timing (PNT) data for their critical infrastructure. For increased time security against GPS spoofing and jamming, Microsemi technology provides security protection to mitigate outages and disruptions to GPS reception.

Want to speak to an expert? Contact your local Microsemi sales office today to find the right technologies and systems for your application.