As of January 2018, the new version of the Markets in Financial Instruments Directive, or MiFID II, has been implemented aiming at creating a more transparent and fair financial environment. One of the implications of MiFID II is the increased requirement in the time accuracy of business clocks. Business clocks in the trading venue and firms must be synchronised to UTC using an implementation that is traceable and has accurate, provable, time-stamping.
The detailed requirements are outlined in the Regulatory Technical Specification (RTS) 25, for example, the accuracy levels are as high as 1 ps, with no more than 100 ps divergence from UTC.
So how can we guarantee these limits are achieved?
Implementation method: NTP/GPS or PTP?
One of the widespread methods for synchronisation in financial markets is NTP (Network Time Protocol). However, for some MiFID II requirements (and the unique applications of some applications such as High Frequency Trading), NTP cannot achieve the required accuracy. Synchronization via PTP (Precision Time Protocol, defined in IEEE1588-2008) offers an ideal solution.
PTP networks not only meet the requirements regarding accuracy, but also the option of additional timing paths for added redundancy to ensure accurate time is maintained in the event of equipment failures, etc.