Matching Engines and Exchanges

When we are initially approached by clients, the terms Exchanges and Matching Engines are sometimes used interchangeably. I think it is important to understand the differences between the terms when talking about a potential project. Understanding the differences allows everyone in the discussion to have a clearer vision of the project scope and complexities.

For our clients, Connamara has built both matching engines and exchanges.

Matching Engines

Matching Engines provide the transactional integrity for an electronic trading venue, marketplace, or exchange. The matching engine can provide various algorithms to facilitate the matching of buyers and sellers. The most common is price-time. Matching engines also can support different order types such as a limit order or market order. Connamara has been a builder of marching engines almost since the founding of the company. Demonstrating our polyglot nature we have built matching engines for our clients using C++, Java, and erlang programming languages. Our latest version is a C++ matching engine that exposes both RestFUL and FIX API for orders and market data. This makes it a perfect solution to back either a traditional FIX exchange or a web based marketplace accessed via browsers or mobile devices.

Example of Our Work

While most of our matching engine implementations provide services to exchanges and marketplaces we have delivered to our clients, we have delivered standalone matching engines. One notable example was a matching engine we build for Rosenthal Collins Group (RCG). This implementation was used to simulate the trading that occurs on a futures exchange. With this simulated exchange,RCG customers to tryout the RCG Onyx trading platform to get the feel of the new platform before trading in a live environment. This matching engine exposed a FIX API for market data and order routing.

With the exception of Eris Exchange, we use our own matching engine in all of our exchange projects.


An Exchange, which leverages the services of a matching engine, provides services and infrastructure necessary to facilitate trading. These can services include the legal and regulatory framework of the exchange, maintenance of trading hours and tradable products, clearing and settling of trades, risk management, trading interfaces and access controls.

Examples of Our Work

Connamara has built or is in the process of building a total of six exchanges. We have used a variety of tools and programming languages. The products trades on the exchanges range from new innovative financial products to carbon offsets to intellectual property.

Our first exchange was build for the Chicago Climate Exchange (CCX) prior to the 2010 acquisition of CCX by the Intercontinental Exchange (ICE). The platform facilitated trading in cash and futures contracts for carbon dioxide offsets. The platform was integrated with the existing clearing and settlement platform of CCX. The exchange platform included a trading and surveillance user interfaces. The user interfaces were available in English and Chinese. The platform was written in the Java programming language.

Another exchange we built was for One Exchange Street. One Exchange Street wanted to bring transparency to the world of bankruptcy trading. The exchange platform we delivered consisted of a matching engine written in the erlang programming language and a trading and administrative portal leveraging the Ruby on Rails framework. The exchange included functionality to manager the vetting of users and claims and was integrated with a third party document management platform. The exchange platform also included functionality to settle the transactions between the buyer and seller.

The Intellectual Property Exchange International (IPXI) was established to trade the intellectual property in the patent portfolios of companies. By issuing standardized Unit License Rights (ULR) (licenses for the use of patents) IPXI hoped to allow companies to fairly value their patent portfolios and reduce the costs of defending their property rights. For IPXO Connamara built an exchange that facilitated the trading of the ULRs. The exchange also provides the services to house and control the patent documentation, settle the trades between buyers and sellers, manage the inventory of for the users who purchased and consumed the URLs. This exchange was built using the technologies of erlang for the matching engine and Ruby on Rails for the trading and administrative functionality.

Eris Exchange is an Designated Contract Market that lists and trades Interest Rate Swap futures., For Eris, Connamara built the infrastructure to integrate the third party matching engine with the clearing provided by CME clearing, the regulator compliance provided by the National Futures Association and exchange member back office systems. Connamara also built the web based block trading application, Eris BlockBox.

Aqua Index Exchange will be the first U.S. Designated Contract Market (DCM) to trade futures contracts on a fresh water index.

American Financial Exchange (AFX) launched in December of 2016. AFX allows small and medium sized U.S. banks to lend and borrow funds from each other.

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