The Hindu Business Line : NMCE to shift trading to VSAT network

THE Ahmedabad-based National Multi-Commodity Exchange of India (NMCE) has decided to shift its online trading operations from Virtual Private Network (VPN) connectivity to VSAT/terrestrial leased line network from July 1.

NMCE is among the few commodity exchanges in the world that uses satellite communication technology for futures trading. "We have decided to shift our online trading operations from VPN connectivity to VSAT network. At present, about 20 per cent members are using VPN connectivity. Now, it will be totally online trading operations through VSAT network from July 1," Mr Neeraj Gupta, Vice- President (Informational Technology), NMCE told Business Line.

"As a part of its business continuity plan, NMCE launched Internet Virtual Private Network (VPN) connectivity in October 2003 in order to facilitate the initial trading by various traders on a demonstration/trial basis and to impart training in the low volume locations. However, VPN has been found to be inappropriate communication network to ensure equal access to all the participants due to various drawbacks in the VPN connectivity through public network of Internet," Mr Gupta said.

The exchange has set a terrestrial leased line for backhaul as a backup to Very Small Aperture Terminal (VSAT) network, enabling a trading member or its traders to carry out his/their normal trading operations from anywhere in the country.

Its trading system, Derivatives Trading and Settlement System (DTSS) is a state-of-the-art client server based application and has an uptime record of 99.7 per cent. For all trades entered into DTSS system, there is uniform response time of less than 2.5 seconds.

The exchange has decided to decrease the number of VPN trading terminals and to limit to five for each clearing member. The five VPN trader IDs allotted to each member should also be used mainly for the demonstration, training for initial trading purpose and not for regular trading.

"Internet connectivity is vulnerable to security threats, viruses and worms that often flood the network with unwanted traffic, which highly decrease the performance. The intermittent delay/loss of data during transmission over the Internet have been observed resulting in delayed updating or no updating of data, which creates false appearance of data on VPN terminals. Hence misleading market view, which lead to wrong trade decisions," Mr Gupta said.

The Internet connections depend upon various external networks and service providers, which makes connection unreliable. The number of hops and latency at each hop in Internet VPN connectivity is variable and highly unreliable.

NMCE has also launched the File Transfer Protocol (FTP) facility for downloading various flat files like Daily Trade reports, Margin reports etc required by the members for their back office software. This facility would be available through Internet as well as extranet i.e. through VSAT/Leased Line.

The introduction of FTP facility for file download would ensure the availability of the flat files to the members at a later stage also for their back-office and thus greatly improve the efficiency of operations, Mr Gupta added.