Burgundy makes Verizon complaint

Verizon has been reported to Sweden’s competition authority over allegations that it has barred a rival of Nasdaq OMX, the New York-based exchange operator, from its network infrastructure.

Burgundy, a Stockholm-based trading platform owned by several of the biggest Nordic financial institutions and which competes with Nasdaq OMX’s Nordic stock exchanges, said Verizon was “choosing sides” in the trading industry by allowing Nasdaq OMX exclusive access to a data center in Sweden. The dispute highlights how data centers are becoming controversial parts of market infrastructure amid a technology arms race in share and derivatives trading. This is intensifying as exchanges, banks and brokers compete to build the fastest and most efficient trading platforms in an era when transaction speeds are measured in split seconds. Traders locate their computer trading systems in data centers in order to be close to an exchange’s trading system, shaving crucial microseconds off the time taken for trades to be done. Regulators are trying to ensure that operators of data centers allow access to them free of discrimination between types of market participant. While exchanges operate their own data centers, many are also run by independent operators such as Verizon, Nasdaq-listed Equinix and Interxion, a large European data center specialist.