GROUNDBREAKING EXCHANGE PLATFORM AND MATCHING ENGINE

EP3 is Connamara’s advanced exchange platform and matching engine technology. Conceived by a trader and built by engineers with years of fintech expertise, it represents the accumulated knowledge and experience of successful deliveries of implementations since 2007. Thanks to its feature-rich functionality, it is the smart choice for both start-up marketplaces and established exchanges.

A Fast and Cost-Efficient Solution for Start-Ups

For startups, EP3 provides the functionality to build and launch an exchange – from the ground up – in a matter of months, or even weeks. It is flexible enough to allow customization to meet the unique needs of a new marketplace that may not fit neatly into the existing pattern of capital markets. Connamara understands the importance of “getting to the first trade” for new exchanges and EP3 is designed to get you there quickly. Read how EP3 got Materials Exchange to its first trade in 4 months.

A Smooth Transition for Exchanges Replacing Legacy Systems

For established exchanges, EP3 offers core functionality as well as a host of add-on integrations, custom development work and support services for comprehensive front-to-back capabilities. As just one example, EP3 offers a set of well documented APIs that can allow an established exchange to replace legacy matching engines with EP3 using a phased approach. A phased approach provides flexibility and reduces the risk of the transition.

Technology Backed by Experience, Reputation and Integrity

The choice of exchange and matching engine technology is the single most important decision an exchange or marketplace can make. And the choice should rest on the talent, experience, reputation and integrity of the developers of that technology. Connamara is justifiably proud of its 20+ year track record of successful deliveries and checks all the boxes:

    • We Understand Trading and Traders, Markets and Marketplaces

Our breadth of experience in different asset classes, market types and trading styles is unrivaled.

    • We Serve the Most Demanding Clients

We understand the urgency of getting something done. Our culture reflects our roots in the trading pits of Chicago where every missed trade is a missed
opportunity.

    • Technology is Our Business, Our Only Business

Technology is not a side hustle for Connamara – it’s what we do. Our clients get our full attention regardless of size. Their goals are our goals, their success is our success. We are their partners, not their competitors.

    • Integrity and Professionalism Above All

We say what we mean. We do what we say. We live by the creed of the pit trader – “never back out of a trade”. Never have.

Get started with EP3. Reach out to our team.

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THE FEATURES THAT SET EP3 APART

ASSET AGNOSTIC

The EP3 matching engine is agnostic to the asset class being traded. This means that EP3 can handle run-of-the-mill futures, options, swaps, securities, and cash instruments but also commodities and intangible assets, like lumber, bankruptcy claims, intellectual property rights, sports gaming, just to name a few.

CUSTOMIZABLE

By exposing a robust set of application programming interfaces, EP3 can be extended and customized to fit the needs of any exchange or marketplace.

PERFORMANCE

EP3 is designed with performance in mind. The EP3 matching engine can sustain an order rate of over 120,000 orders per second at a sub-8 microsecond average latency.

SCALABILITY

EP3 can scale horizontally by the addition of new matching engines to accommodate increases in trading activity. Matching engines can be added dynamically in real time during the trading day.

RESILIENCE

EP3 can be deployed in a hot primary / hot secondary, warm disaster recovery configuration. A failure in one matching engine will be recovered automatically by restarting a new instance of the engine.

DEPLOYMENT INFRASTRUCTURE

EP3 offers the latest in application containerization and orchestration technologies. This means that EP3 can be deployed to any cloud provider and/or to any customer on-premise data center.

Learn what these features can do for your business

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ORDER MATCHING RULES

By default, EP3 implements a standard price-time-priority matching algorithm via a Central Limit Order Book (CLOB) that is optimized for maximum throughput. However, the matching engine is designed in a modular fashion, allowing any custom implementation of an arbitrary matching algorithm to run within EP3. In previous engagements, we have leveraged this capability to support bilateral, pro-rata, prediction, and other esoteric matching rules.

REQUEST FOR QUOTE

EP3 supports Request for Quote (RFQ) workflows. In contrast to central limit order book (CLOB) trading, which is usually anonymous, the parties trading via RFQ are typically aware of whom they are trading with and direct the requests to known parties. While RFQ trading can be used on standardized highly liquid instruments, the transparency makes it well suited for highly customizable, illiquid instruments.

MARKET TYPES

EP3 is built to accommodate all types of markets and trading environments. From new
marketplaces to traditional regulated exchanges.

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ASSET CLASSES

Since 2007, Connamara has worked with clients on exchanges and new marketplaces for
recognized asset classes and a broad range of assets that have never been exchange traded
like bankruptcy claims, patent rights, carbon certificates, swaps, events, and betting.

Contact us to see how EP3 can work for your assets classes

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FEATURE-RICH FUNCTIONALITY

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EP3 SERVICES

EP3 provides all the functionality and services to launch an exchange.

Provides the central limit order book matching buyers to sellers on a price time priority.


Manages tradable instruments and book creation, deletion, and state changes.


Maintains a record of order state and history. Manages workflows for Request for Quotes and Auctions.


Listens for book events to produce trades with buyer and seller information for clearing and settlement.


Manages users, market participants, participant groupings, and participant suspension.


Encapsulates the pre-book risk checks for instrument states, absolute and relative price limits, order size limits, currency balance and position size checks.


AVAILABLE EP3 APIs

EP3 exposes several application program interfaces (API) to allow customers to enter orders, receive market data, and subscribe to drop copies. These include industry standards such as FIX (Financial Information eXchange), GRPC (Google Remote Procedure Calls) using Google Protocol Buffers, and REST.

Allows client applications to send orders and receive market data via Google protocol buffers.
Supports C/C++, Java, C#/.NET, Python, Go, Javascript and more.


A FIX endpoint allowing connected clients to send and manage orders and access RFQ functionality.


Presents a FIX endpoint to allow connected clients to receive market data via the FIX protocol.


Allows client applications to administer and operate the exchange.

  • Contribution – allows custom indices to be published on the market data feed.
  • Clearing & Settlement – Exposes information necessary to integrate with clearing houses and back office systems for post-trade processing.

Exposes basic user and service authentication services.


The REST API exposes EP3 functionality as a RESTful web service.


SERVICE
PURPOSE
EP3 API(S) USED
VALIDUS – EVENTUS SYSTEMS
Trade Practice
 Surveillance
FIX Drop Copy, Admin

TRAIANA
Pre-trade risk for Interest Rate Swaps
Admin API

CME CLEARPORT
Clearing and Settlement of Interest Rate Swaps
Admin API- Clearing

LCH
Clearing and Settlement of Interest Rate Swaps
Admin API- Clearing

GLOBAL TRADE REPOSITORY – DTCC
Regulatory Reporting for Interest Rate Swaps
FIX Market Data API – Drop Copy, Admin API

CFTC PART 16 REPORT
Daily Trade Activity Report delivered to CFTC for SEFs or DCMs
Admin API

BASIS – REACT CONSULTING SERVICES
Back office accounting and statement generation
Admin API

The EP3 administrative interface has several features to allow the exchange staff to manage the operations of the exchange. Included but not limited to user, participant, and account creation. Instruments, exchange hours are also managed through the EP3 Administrative interface.

The EP3 monitoring and alerting framework allows operations teams to create custom alerts and observability dashboards to monitor system health and to proactively take steps to head off any potential disruptions.

 

EP3 leverages the OpenTracing framework for distributed tracing messages. This means that every single request into the system is logged and traced between all microservices on the system so there is an audit trail of EVERY request, admin or user, on every API.

RISK CHECK
DESCRIPTIONS
PRICE LIMITS
Prevents orders from being entered, amended, or matched at prices that are outside configurable high and low limits
ORDER SIZE LIMITS
Prevents orders from being entered or amended with quantities greater than a preset limit
SELF-TRADE PROTECTIONS
The EP3 APIs include an optional STP ID that is included on new order requests. If an in-flight order includes an STP ID, and that order has the potential to cross a resting order in the exchange with the same STP ID, the in-flight order will be rejected with reject reason “Order rejected due to self-trade prevention”. If a cancel replace request would similarly potentially result in an internal match of orders with identical STP ID, the system will reject the Cancel Replace request with reject reason “Cancel Replace rejected due to self-trade prevention”.
USER VALIDATION
Each new order, order amend request, and cancel request contains an attribute identifying the participant responsible for entering the order. A check is performed to determine if the participant is known to the exchange and that the participant is not suspended.
EXTERNAL RISK MODULE
For implementations that require a customer-specific set of risk checks, EP3 defines an external risk API. If enabled, order events will be forwarded to the external risk module, which can asynchronously process each request. An approval/rejection message will be sent back to EP3 when checks are complete.
TRAIANA LIMITHUB
Participants can have a pre-set risk limit at the FCM. Orders and quotes will be risk checked by Traiana LimitHub. Risk approval has a specific expiration time window, defined by FCM. FCM can suspend or restore the credit of a participant firm or its specific account.
THIRD-PARTY
DESCRIPTIONS
PRE OPEN
Allows participants to enter and cancel orders prior to the market opening. No matching occurs. Market orders are not allowed while the market is in this state.
OPEN
Upon transition from Pre Open to Open, orders entered during the pre open session along with any open GTC orders are matched using an algorithm that results in the highest volume transacted at a single price that will clear the market. Market is then open for continuous trading.
CLOSED
Market is closed for trading. Day orders are canceled. GTC orders remain open.
SUSPENDED
Participants can cancel working orders but cannot enter new orders nor amend existing orders. No matching occurs.
HALTED
Book is closed. Participants cannot enter, cancel, or amend orders. No matching occurs.
PENDING
Instrument has been created. Awaiting book creation. Changes can be made to the instrument definitions
EXPIRED
The book is past the last day of trading of the instrument.
TERMINATED
The book has been removed from the matching engine.
ORDER TYPES
DESCRIPTIONS
LIMIT
A limit order is an order to buy or sell an instrument at a specific price or better.
STOP
A stop order, also referred to as a stop-loss order, is an order to buy or sell an instrument once the price of the instrument reaches a specified price, known as the stop price.
STOP LIMIT
A stop-limit order is an order to buy or sell an instrument that combines the features of a stop order and a limit order.
MARKET WITH LEFTOVER TO LIMIT
An order to buy or sell a stated amount of a security at the prevailing market price with any unexecuted (leftover) quantity becoming a Limit order at the last executed price.
NAME
DESCRIPTIONS
TRADER
Trading participant user on the platform
READ-ONLY 
SUPERVISOR 
ADMIN
Admin user who performs market surveillance and entity viewing activities on the platform
SUPERVISOR ADMIN
Admin user who performs market surveillance and entity CRUD activities on the platform
FIRM TYPE
DESCRIPTIONS
PARTICIPANT FIRM
Participant firms are the general (trading) organizations participating in the market.
CLEARING HOUSE FIRM
Clearing house firms are Derivatives Clearing Organizations(DCOs) where the trade executions of the traded instruments will be cleared.
CLEARING MEMBER FIRM
Clearing member firms are Futures Commission Merchant (FCMs) where participants may have accounts.
AGENT FIRM
Agent firms are third parties that trade on behalf of clients
SUPERVISOR FIRM
Supervisor firm performs market surveillance and entity CRUD(create, read, update, and delete) activities.
NAME
DESCRIPTIONS
CLEARING HOUSE-CLEARING MEMBER
The Clearing house-clearing member association is to associate clearing house firms with one or multiple clearing member firms. The relationship is many-to-many.
CLEARING MEMBER-PARTICIPANT FIRM
The Clearing member-participant firm association is to associate participant firms with one or multiple clearing member firms. The relationship is many-to-many.
PARTICIPANT FIRM AFFILIATION
The Participant RFQ association is to associate a participant firm with other participant firms that are allowed to send RFQ to the participant. The relationship is many-to-many.
PARTICIPANT AGENT
The Participant Agent association is to associate an agent firm with other participant firms so that the agent firm can perform order management activities on behalf of the associated participant firm. The relationship is one-to-many.

EP3 Trader is a customizable web and mobile responsive user interface for entering orders to the exchange.

As an add-on to EP3, clients can leverage the base functionality of EP3 Trader. Connamara professional services team can customize EP3 Trader to meet specific customer needs.

CUSTOMIZATION

EP3 provides all the functionality, reliability, and scalability to successfully launch and operate an exchange, but Connamara understands that many exchanges have unique needs and goals that require custom development work. For example, the exchange may need to send trades executed on EP3 to a clearing organization for trade clearing and settlement. Or, it may want to use a third party for trade practice surveillance.

This is where Connamara Professional Services (CPS) comes into play. CPS will work with the exchange to fully understand the unique requirements of its marketplace and asset class and provide business analysts and development staff needed to customize its platform or matching engine. Leveraging the EP3 flexible architecture, CPS will extend or enhance the EP3 functionality needed to meet these exchange specific requirements. CPS will also work with third party providers of downstream services to integrate with EP3.

Contact our Team to Learn how Connamara’s Professional Services Team can Customize EP3 for your exchange.

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24×7 SUPPORT

To operate an exchange successfully requires full time monitoring and support of the platform. Connamara Support Services (CSS) can provide highly experienced technical staff to monitor and support the operation of the platform up to 24×7.

This staff can monitor for anomalies, issue identification, escalation, and resolution. The amount of support is tailored to the needs of the client. Some clients need a comprehensive program that includes 100% coverage, others may have their own staff who may only want to use CSS for issue escalation and resolution.

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SUCCESS STORIES