Implementation of MiFID II requirements in the financial sector

Ensuring accurate and secure clock synchronisation and timestamping is a major challenge for financial firms. The need for pre and post-trade transparency is a critical piece in earning and keeping investor trust in the capital markets. Any firm that trades needs reliable, synchronised clock feeds to connect to their trading applications and order management systems. In many IP networks, NTP (Net Time Protocol) is used to supply clients and peripheral systems with a precise time. If a very high time accuracy is required due to, for example, Banking or legal requirements, the use of the PTP (Prescision Time Protocol) protocol is essential. The Mobatime Grandmasters are combined time and synchronization systems that stand for maximum precision and availability. They can be used as IEEE-1588 PTP Grandmaster and thus meet the basic requirements, for example, to comply with the strict requirements of MiFID II regarding time accuracy in the area of ​​high-frequency trading.

High-precision time is a topical issue for the financial sector. The requirements of MiFID II (Markets in Financial Instruments Directive) must be implemented. The regulations came into force in January 2018 and aim to increase transparency in the financial area. All transactions in retail now have to be given a precise time stamp.

MiFID II currently requires an accuracy of 100µs compared to UTC for high-frequency trading, which cannot be achieved with an NTP-based synchronization system. Switching to synchronization via PTP is essential.

The PTP Grandmaster as the synchronization source must have a very high level of accuracy, from the GNSS receiver to the PTP output. The DTS 4160.grandmaster Type C or the time center DTS 4210.timecenter from MOBATIME achieve a precision from GNSS receiver to PTP output of +/- 0.25µs. This ensures that, despite the accumulation of further delays due to the transport of data packets in the network, the accuracy of the time stamp of 100 µs is achieved.