Time to Market Is the New Liquidity Play for Exchanges

For most of the last two decades, exchanges have competed on liquidity, listings and latency. Increasingly, they're competing on something less discussed but just as decisive: how quickly a new participant can actually get connected.

That was the throughline of two webinars Beeks ran with the World Federation of Exchanges (WFE) in April, featuring technology and sales leaders from ASX and TMX. Both sessions covered different markets, different regulatory environments and different customer bases, but they arrived at strikingly similar conclusions. Time to market isn't a footnote to the access conversation anymore. For a growing share of the market, it is the access conversation.

How Have Barriers to Entry Changed?

Barriers to entry aren't new. What's changed is their composition. Historically, the conversation centred on cost and latency: could a firm afford a footprint close enough to the matching engine to compete? Today, the panels argued, four factors interact to determine whether a firm can enter a market at all: cost, timeframe, complexity and risk.

The timeframe is the one that has moved fastest. As one ASX speaker put it, connecting to a new exchange looks like a straightforward technical hookup, but in practice it involves securing internal funding and sign-off, ordering rack space and cross-connects, procuring and shipping hardware, and racking, configuring and testing it. This is a sequence that, from a standing start, can run into months for larger organisations and knock smaller ones out entirely.

TMX's team framed the same problem in a single figure: testing whether a strategy is even viable on a new equities exchange has traditionally taken around six months, just to find out if there's alpha there at all. In a market moving as fast as this one, six months is long enough for the opportunity to have already passed.

Hardware Procurement Is Slowing Down Market Access

Part of what's driving this is the physical supply. Hyperscalers have been pre-buying memory and storage capacity to build out AI-ready data centres, and the knock-on effect for anyone else trying to buy server components has been significant. Gartner's most recent forecast, referenced during the ASX session, put RAM demand up 125% year on year and SSD demand up 234%, with a supply crunch expected to persist until at least 2027. The practical consequence: a hardware quote today might carry only 24 hours' validity, and even once a decision is made, delivery can take 6 to 12 months.

For a firm trying to build its own trading-ready infrastructure from scratch, that timeline alone can be enough to end the project before it starts, regardless of whether the firm is a five-person prop shop or a global bank.

What Does "On-Demand" Access Actually Change?

The alternative both exchanges described isn't a replacement for colocation. Both panels were explicit that colocation, in its traditional form, isn't going anywhere. HFT and other ultra-low-latency strategies will always need dedicated, physical proximity to the matching engine. What's changing is that exchanges are now offering a second, complementary access model: pre-built, standardised infrastructure that a firm can consume on demand, sitting inside the exchange's own data centre.

The numbers involved are stark. Testing a new venue under a traditional colocation model – a cabinet, networking hardware, servers and a roughly annual commitment – was described as typically running to around half a million dollars and taking close to six months to go live. The on-demand alternative: several servers spun up within a day, for a few thousand dollars a month, often structured around a short test period (in the region of 30, 60 or 90 days) before a firm needs to commit further, though terms vary by exchange and use case. That shifts market entry from a capital project requiring board sign-off to an operating expense a desk head can approve, which matters because several speakers noted that CapEx approval, not cost per se, is often what kills a project before it reaches procurement.

This isn't only a new-entrant story, either. Tier-one banks running 50 to 60 colocation footprints globally are increasingly looking at on-demand infrastructure as a way to manage hardware refresh cycles, which typically fall every four to five years, without the ongoing burden of doing it themselves in every single location.

Why Time to Market Matters Commercially, Not Just Operationally

For exchanges, the case isn't only about serving participants better; it's a genuine commercial shift. ASX described moving from selling space, power and connectivity to also selling compute and hardware: a new product line layered onto what was traditionally viewed as a cost centre. It's also helping exchanges make better use of colocation space that's already sold but underutilised. Clients occupying a fraction of a cabinet can migrate to an on-demand model at their next refresh, freeing capacity to sell to clients who need it in full.

There's a liquidity argument too. WFE's own research has previously linked market liquidity to whether issuers choose to list there in the first place, and the organisation has separately flagged the risk exchanges run if they don't keep pace with market expectations. This was originally in the context of extended trading hours, but the panels argued the logic applies just as directly to time to market. Capital allocates to the path of least resistance; if a competing venue makes it faster and cheaper to test a strategy, that's where the capital goes. JSE, an early adopter of this model, has publicly linked its rollout to a measurable increase in trading volumes on its market, a proof point other exchanges are now watching closely.

Is Time to Market Only About Speed?

Both sessions were clear that the value proposition doesn't stop at onboarding speed. A few themes stood out as the conversation developed:

Data sovereignty: Because on-demand infrastructure sits physically inside the exchange's own data centre, firms in regulated markets can meet requirements around where data resides and how it's controlled without the ambiguity that can come with public cloud.

Standardisation with room for exceptions: Both exchanges offer a small number of standard server configurations to enable fast deployment, while leaving room for bespoke setups where a client's strategy genuinely requires it.

A shift towards managed services: Several speakers noted a newer and, in their words, unexpected trend: large, sophisticated firms actively asking exchanges and infrastructure providers to take on more of the operational stack, including OS-level management, patching and security scanning, rather than running it themselves.

International expansion friction: Importing hardware into a new jurisdiction typically requires a local entity, and contracting with a new service provider per market can add months (a single bank MSA can take close to a year to sign). An on-demand model inside the exchange removes both of those steps, since the client contracts only with the exchange it already has a relationship with.

The Next Step

None of this suggests traditional colocation is being displaced. What both webinars pointed to is something more specific: exchanges that offer a genuine choice of access models – physical colo, on-demand infrastructure and hybrid combinations of the two – are better positioned to widen their participant base, protect against liquidity fragmentation and turn infrastructure from a cost centre into a product line.

Time to market has quietly become a competitive variable in its own right, sitting alongside liquidity and listings as a reason firms choose one venue over another. For exchanges assessing their own infrastructure strategy, the question worth asking is: "What does it cost us, commercially and competitively, if we don't?"

Beeks's Exchange Cloud® platform powers the on-demand infrastructure models referenced in this article, including ASX's Colo OnDemand and TMX's Elastic Market Access. If you'd like to discuss how this applies to your own market, get in touch with the Beeks team.