The exchange has planned an increase in the number of colocation racks.
The National Stock Exchange of India (NSE) has revised annual recovery charges (ARC) for connectivity and colocation (colo) services, offering a 50 per cent reduction in charges on Wednesdays and Thursdays across most message rate categories.
The revised charges would be applicable from February 16, the exchange said in a circular issued on Friday.
Colo services allow trading members to place their servicers inside the exchange’s data centre, allowing faster data and execution of orders and reduced network latency. The service is widely used by high-frequency traders (HFTs) and institutional traders.
“NSE is trying to protect its market share where a shift has been happening. Wednesdays and Thursdays are more heavy on volumes for BSE due to the weekly expiry. However, these kinds of pricing changes may not determine the trading strategies for any large HFTs or large traders,” said an analyst on the condition of anonymity.
“The changes in ARC shall be applicable for message rate categories subscribed in both non-colo, i.e., leased line connectivity options and Colocation except for Category A links,” the exchange noted.
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There are different categories based on messages per second, with Category A being the lowest. At present the current ARC ranges from ₹2.5 lakh to ₹2.5 crore, excluding Category A.
For all other days of the week, members will be charged the base rates currently applicable.
The exchange has planned an increase in the number of colocation racks. In its recent earnings concall, the exchange’s management had noted that they have allowed different dates for people to have higher connectivity rates vis-à-vis lower connectivity rates. Though it reduces cost for the members, it ends up increasing the volumes, which helps in the actual transaction charges, the management had added.
Transaction charges are the biggest component of the income for the exchanges.
The move is part of the NSE’s ongoing efforts to review and enhance its connectivity framework, to enable members to conduct operations more efficiently, it said.
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