The stock exchanges in New York rely on some massive data centers and high quality fiber to send and receive trades from all over the world at top speed. But as the demand for high quality hosting explodes in New York, the NYSE is hoping to book some additional revenue by opening up its Mahwah, New Jersey data center to clients outside the broker dealers they were already working with, booking a little extra revenue on the side.
NYSE has to appeal to the SEC for a rule change on this. They hope to charge these third party vendors $500 monthly fees and allow them to provide a range of services to customers. From the SEC filing reported at Wall Street and Tech:
The exchange anticipates that the potential additional users would provide, for example, hosting, service bureau, technical support, risk management, order routing and market data delivery services to customers while the user is co-located in the Exchange’s data center.
As Betabeat loves to point out, New York is actually an important backbone for the entire internet infrastructure along the east coast. At 60 Hudson Street, formerly a telegraph office, then a hub for the phone company, an enormous amount of internet traffic is routed on its daily journey. And Google shelled out $2 billion this time last year for 111 Eighth Avenue, New York’s “premier coho” or “Carrier Hotel”.
The financial sector is footing the bill to expand that infrastructure in New Jersey. But according to these recent reports, “One can quickly see how colocation is shaping up to be a lucrative business for exchanges.” There’s no small irony here, given that a year ago, the NYSE was arguing the SEC should be putting other colocation providers under tighter regulation. If you can’t beat em’…
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