We suggested recently that the SEC's ban on "naked" sponsored access, while frustrating for some high-frequency trading firms, was inevitable. Some complained, others were busy exploiting the ban as a marketing advantage.

Lime Brokerage saw it coming and was quick to market with its solution. So, too, was Fixnetix, which just announced it had filed a patent for an microchip that can enable trading in just 8 microseconds and greatly increase the speed at which pre-trade risk controls are executed. It appears to pick off two birds with a single stone.

In the wake of the "naked" access ban, many were concerned that trading and execution speeds would suffer. Some think high-frequency trading firms will have little choice but to opt for broker-dealers that offer the greatest speed and the most lenient controls.

The company claims that its new chip in a co-located setting "enforces pre-market risks" and helps filter out erroneous or rogue orders at nano-second time frames. At the same time, it does raise the latencies that people expect once the new SEC rule is in place. "Unlike other solutions, the iX-ecute microchip has zero impact on latency for governing the required checks directed by the recent" rules, notes Fixnetix. That's a bold claim, to be sure.

We'll no doubt see other solutions emerge as the funds gear up for the new rule. It's interesting that we're seeing software and hardware solutions.

For more:
- here's a Financial Times article
- here's the release

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