Financial traders in the EU must follow the rules of MiFID II (Markets in Financial Regulations Directive). This includes those from outside the EU who wish to conduct transactions within it. This directive even extends to accommodating for time stamp traceability.
Traceable to UTC
Depending on the type of trading you are conducting, you will need time in your trading engine to be traceable to UTC. The international standard of time complicated by the BIPM in Paris from atomic clock data from National Laboratories and others across the world. Also, you must show that you are delivering this traceability.
For the purposes of MiFID II, sourcing time from any contributor to UTC is deemed to be traceable to UTC. The US Naval Observatory (USNO) maintains the timebase for the GPS satellite system as well as contributing to UTC, so a clock using GPS as an input can be considered as UTC traceable for MiFID II.
Third-Party Time Services
Some national laboratories are making their time available in certain locations via fibre. For example, the National Physical Laboratory (NPL) has such a service in some UK data centres. It is also important to consider that other third-party timing services will not necessarily satisfy this UTC requirement, regardless of how accurate and stable their time service is.
Summary
Your responsibilities for traceability do not necessarily end there. MiFID II requires UTC traceability at the trading engine, not your incoming clock source, so due regard must be given to the time delivery service to your applications. I will examine this issue further in future posts, so look out for those on our feed.
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