Bolsa Mexicana de Valores Improves Performance with Red Hat Solutions

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May 29, 2013

Bolsa Mexicana De Valores (BMV) sought a scalable, flexible, low-latency, and cost-effective solution that would guarantee availability of a mission-critical application with a large number of transactions per second.

Customer: Bolsa Mexicana de Valores Improves Performance with Red Hat Solutions

“We were very happy to learn that open source products could compete in quality and performance with proprietary software products. Red Hat is a company that knows how to listen to its customers’ needs." - Luis Carballo, Software Factory Director of the Bolsa Mexicana de Valores

Geography: LATAM
Country: United States


Business Challenge:

Bolsa Mexicana De Valores (BMV) sought a scalable, flexible, low-latency, and cost-effective solution that would guarantee availability of a mission-critical application with a large number of transactions per second.

Benefits:

BMV encountered improved performance (from 24 milliseconds to 100 microseconds per transaction), lower latency, increased availability, and lower implementation and operation support costs

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Background:

The Bolsa Mexicana de Valores is a financial institution operating under a concession from the Ministry of Finance and Public Credit, in full accordance with the Exchange Act. Its shares have been listed on the stock exchange since June 13, 2008. The Bolsa Mexicana de Valores (BMV) is Mexico’s only stock exchange. Its goal is to enable the performance of securities transactions, achieve market development, and promote its expansion and competitiveness using industry-leading technology. The BMV designs, develops, implements, integrates, and operates a large variety of automated information and communications systems for the financial sector, with the aim of fostering Mexico’s financial development. Together with other institutions in this sector, it has helped channel savings into productive investment, the main source of growth and employment in the country.

Business Challenge:

Outdated languages and technologies slow transaction times and increase costs

In August 2009, after extensive research of the trends followed by leading worldwide stock exchanges, the BMV started the renovation of its own trading system for stock market operation called MoNet (Motor de Negociación Transacccional), which would replace the SENTRA Capitales system.

The most critical applications of the BMV require fault-tolerant technology. Bolsa Mexicana de Valores developed a centralized architecture known as NonStop. With NonStop, a redundant number of processors and storage devices can quickly respond to a fault, even when the hardware fails.

Because of NonStop’s robustness and architecture, when the BMV needed to make changes or alter performance capabilities, response times were limited. Cobol and C programming languages and other specialized technologies, some of which were on the verge of obsolescence, made daily support and maintenance cost-inefficient.

The challenge with MoNet was to achieve levels of latency and performance similar to those seen in the best stock exchanges in the world. The BMV wanted to be able to run transactions in under 100 microseconds each, and satisfy any business rules being used.

“We needed to reduce costs and times without compromising the robustness of the trading engine, and Red Hat Enterprise Linux gave us the chance of not only maintaining, but also improving, its operation,” said Luis Carballo, Software Factory Director of the Bolsa Mexicana de Valores.

MoNet had to be a scalable and flexible system, with independently updated individual modules. This is to reduce dependency on other systems in the exchange and optimize efficiency. MoNet must also supporting a large number of transactions per second and allow BMV to maintain control of the created environment.

Solution:

Multiple open source solutions work together in one dynamic system

“The chosen solution was intended to run on par with systems being run by the world’s leading stock exchanges, like the ones in New York and Asia,” said Carballo.

The solution focused on migrating languages from Cobol to Java(TM). Combined with Red Hat® Enterprise Linux®, this makes communication through the Infiniband communications network more efficient and agile.

The BMV chose Red Hat JBoss® Operations Network as the market index engine, where real-time CPI is calculated. Red Hat JBoss Operations Network is also used to authenticate operator’s terminals and for screen configuration.

The project was completed in April 2013, resulting in a noticeable cost reduction through the use of open source platforms.

“Red Hat provided us with a solution that fulfilled the main criteria: low latency, high performance, and availability — all with lower support and implementation costs,” said Luis Carballo.

Benefits:

Improving scalability and efficiency is an investment in Mexico’s financial future

“MoNet has allowed us to decrease response times from 24 milliseconds to 100 microseconds, supporting 100 thousand messages per second per group of boxes. Before, we were only capable of supporting less than one thousand messages per second per group,” said Carballo.

For the BMV, improving system scalability became an investment rather than a recurring expense. The hardware used to support the engine in the current MoNet system is at least 50% more efficient, with a 240% higher throughput capacity and more flexible, scalable configurations.

The BMV now has an efficient, stable system that is in accordance with the highest safety standards. It has fast response times and a very low maintenance cost. Because it can connect with more and more brokers — regardless of the number of business rules that need to be accommodated — the BMV is able to encourage growth of the exchange’s Mexican market. Decentralizing the system has also allowed for quick detection of human errors without affecting
day-to-day operations.

“The Red Hat subscription model has allowed us to grow at the pace of the number of servers we need. I can manage the subscriptions with the required flexibility to decide which servers they are needed for, as well as the support level required,” said Carballo.

MoNet has replaced the three main systems of the Bolsa Mexicana de Valores: one in the capital market and two in the derivatives market. This translates to a maintenance cost reduction, as updating or fixing the system of one market is useful to all three.

“Red Hat is an open system where I can easily find experts in the market. With Red Hat I will have the support I need when I need it,” said Carballo.

The BMV looks forward to implementing more Red Hat products

“We have been consolidating the platforms and, today, we have a large installed base of equipment running on Red Hat, and we have achieved stability for those systems. We are now evaluating Red Hat JBoss technologies, which we hope will become seamlessly integrated with our infrastructure,” said Carballo. “We were very happy to learn that open source products could compete in quality and performance with proprietary software products. Red Hat is a company that knows how to listen to its customers’ needs.”

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