Fair Market Data Distribution via Encryption and Multicast
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Solution Overview
Problem
In electronic trading venues, ensuring fairness in market data distribution is challenging due to differences in credit relationships among market participants, leading to unequal access to market data updates, which can result in significant delays between the first and last participants receiving the data.
Innovation Solution
A system that encrypts market data updates and synchronizes the provision of encryption keys to all participants, ensuring they can access the data simultaneously, using a combination of encryption and multicast protocols to manage credit-screened market data distribution.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If point-to-point communication protocol is used to send credit-screened market data to different participants, then each participant receives their customized view of the CLOB, but significant delays occur between the first and last participants receiving the data
Solution Approach 1:
The market data is segmented into two components: encrypted market data updates and decryption keys. The encrypted data is transmitted via multicast to all participants simultaneously, while decryption keys are distributed individually through point-to-point channels. This segmentation allows simultaneous delivery to all participants while maintaining customized access control.
Solution Approach 2:
Encryption and decryption serve as intermediary mechanisms that mediate between the need for simultaneous data distribution and customized access control. The encrypted data acts as an intermediary form that can be uniformly distributed via multicast, while the decryption keys enable individualized access without affecting the simultaneous delivery of the core market data.
2Loss of time
If IP Multicast protocol is used to transmit market data updates, then all participants receive data at substantially the same time, but the same view of the CLOB is transmitted to all participants without credit screening
Solution Approach 1:
The solution segments the market data distribution into a common encrypted component (transmitted via multicast for simultaneous reception) and individualized decryption keys (distributed via point-to-point for customized access). This allows the benefits of both multicast and credit-screened customization to coexist.
Solution Approach 2:
The state of the market data is changed from plaintext to encrypted form, fundamentally altering its properties. This parameter change (encryption) allows the data to be uniformly distributed via multicast while maintaining the ability to provide customized access through selective key distribution, thus resolving the contradiction between simultaneous delivery and customization.
3Reliability
If encryption is applied to market data updates, then fair access is ensured across all participants, but additional complexity is introduced in key management and distribution
Solution Approach 1:
The encryption system serves multiple functions simultaneously: it ensures fair access to market data, enables simultaneous distribution via multicast, maintains security through controlled key distribution, and facilitates both customized and uniform data delivery. This multi-functionality justifies the added complexity by resolving multiple contradictions at once.
Data Source
AI summary
The invention relates to systems and methods for distributing market data. In one implementation, the system may generate a new encryption key at each market data update, and use that key to encrypt each market participant's data in that update before it is sent. Among other factors, characteristics of modern computer networks may cause participants to be sent (and to receive) their encrypted data in that update at different times. After the participants have all been sent their data in that update the system may then simultaneously transmit to those participants the key that will enable them to decipher their data. In an implementation, the key may be transmitted via a multicast transport protocol which can be used to ensure all recipients receive it at the same time. In this manner the invention may ensure that although participants receive their data in a given update at different times, they are unable to decipher that data until substantially the same time.