Business Need

In partnership with India’s leading stock exchange, the client was developing a system to enable its derivative trading (DT) members to trade on the Indian stock exchange’s International Financial Services Centre (IFSC). The client required a partner to conduct non-functional testing (NFT) to ensure the system met stringent regulatory standards while being secure, robust, reliable, and scalable, with a 99.99% annual uptime.

Business Challenge

Globalization has significantly reshaped the financial landscape. To align with this vision, a financial hub was established in India, supported by tax incentives and a relaxed regulatory framework from the Indian government. This hub, built to attract capital inflows and export financial services, includes the Indian stock exchange’s IFSC, offering international investors access to Indian securities.

Our client, Asia’s leading securities and derivatives exchange, collaborated with the Indian stock exchange to develop a system that allows its members to trade on the IFSC platform. These trades, executed by the client’s DT members, would be routed to the client’s Derivatives Clearing System for post-trade activities. The system architecture required resilience with no single point of failure.

For IT disaster recovery (ITDR), the system was expected to adhere to the following recovery key performance indicators (KPIs):

• Recovery Time Objective (RTO): 4 hours.
• Recovery Process Objective (RPO): 0 RPO for trades on the Indian stock exchange’s IFSC. In a disaster recovery scenario, the IFSC would remove all unmatched orders.

Additionally, the system had to handle trade downloads from the Indian stock exchange’s IFSC for reconciliation and manage exceptions in case of market or system outages at the IFSC or the client’s data center.

The client sought a partner to perform NFT on the system to ensure these conditions were met. The following specific challenges needed to be addressed:

• Creation of input test data as per client requirements.
• Conversion of input test data into Tick-by-Tick Data via Multicast (MTBT).
• Testing of multiple releases due to functional and non-functional issues observed during mock and weekday testing.
• Dependency on weekend mock testing for load testing due to limitations of the IFSC’s Quality Assurance (QA) environment.
• Customization and use of NuSummit’s simulator for load testing, addressing the order rate limit constraint of the IFSC’s QA environment.
• Dependency on the client’s team for failover testing, as NuSummit did not have access to the process server.
• Creation of a performance test report for weekend mock testing.
• Publishing latency and reconciliation reports on a per-test-case basis for weekend mock testing
• Managing frequent changes in testing expectations.

Business Solution

With extensive expertise in the capital markets domain and an in-depth understanding of the Indian stock exchange’s IFSC, NuSummit became the client’s strategic testing partner. We utilized our advanced order injection tool, the Volume Generation Tool (VGT), to simulate market conditions, producing liquidity and load like a live market environment.

For the client, we used VGT to perform the following functions on a live market environment as per the client’s data requirements:

• New order generation
• Order modification
• Order cancellation

We conducted the Non-Functional Testing (NFT) as follows:

• Production-Like Testing Environment: Established a realistic test environment to mimic actual transaction volumes and order book complexity.
• Protocol Customization: Tailored VGT for Financial Information Exchange (FIX) and Non-NEAT Frontend (NNF/TCP) protocols, deploying it directly within the client’s infrastructure.
• Dynamic Order Injection: Configured a flexible order rate of 0-30 transactions per second (TPS) per user, supporting up to 80 concurrent users.
• Scalability and Capacity: Built a scalable system architecture, supporting billions of transactions with both horizontal and vertical scaling capabilities.
• Performance Assessment: Evaluated system performance through KPIs such as latency, throughput, error rate, and server resource usage (CPU and memory).
• Failover Testing: Executed failover test cases to verify the robustness of the system’s fallback mechanisms.
• Detailed Planning and Estimation: Maintained detailed planning and estimation throughout the testing phases.
• Graphical Order Summaries: Provided clear visual representations of order summaries to track test progress.
• Comprehensive Order and Trade Reconciliation: Enabled accurate reconciliation for orders and trades, ensuring data integrity.

Throughout the NFT, the Drop Copy receiver ensured that Clearing Members received all orders and trades, while the Market Data receiver identified and flagged missing responses in multicast broadcast messages.

Our dedicated team of testers and developers ensured thorough, efficient testing. Regular client meetings facilitated quick issue resolution and collaborative planning. We also provided dedicated, timely support throughout the test execution, ensuring smooth and effective delivery.

Tech Stack