The above dictum can be applied absolutely literally to electronic trading platforms – since significant quantities of stocks and currencies are bought and sold microseconds apart at differing rates.
Financial Regulators all over the world, realizing this need, are now requiring all share trading platforms to use IEEE-1588v2 technology to synchronize to a GPS / GNSS based time-source with micro-second accuracy so that buy and sell orders can be executed with precision according to their time-stamp.
Accurate and precise time stamping is required for compliance with financial regulatory mandates such as the Sarbanes-Oxley Act of 2002 (SOX), the FTC's Gramm-Leach-Bliley Act (GLBA), FINRA's Order Audit Trail System (OATS) and the Payment Card Industry Data Security Standard (PCI-DSS).
The 2015 European Securities and Markets Authority MiFID II regulation requires clock accuracy and granularity in stock trading to have a time-stamp accuracy of better than 100 microseconds to UTC with a granularity of 1 microsecond.
To fulfil this requirement and fulfill the regulatory obligations and stipulations, all electronic share trading platforms must:
- Install GPS / GNSS based IEEE-1588v2 Grandmaster Clocks that use BCMA (Best Master Clock Algorithm) for automatic Fail-Over / Redundancy.
- Install IEEE-1588v2 Slave Clocks in Servers that can synchronize to the GPS / GNSS based IEEE-1588v2 Grandmaster Clocks and provide better than 100 microsecond time synchronization accuracy with 1 microsecond granularity.
- Submit to periodic (quarterly / bi-annual) Synchronization Audits (and obtain documented audit reports) so ensure that the GPS / GNSS based IEEE-1588v2 Grandmaster Clocks and the IEEE-1588v2 Slave Clocks installed in the Servers are complying with / maintaining the synchronization accuracy.