An Exchange Gateway Device is a computer system conceived and under development by Fair Trading Devices, LLC.

This device or system will be located so that it will receive all trading messages from those traders wishing to tender buy or sell orders for execution by the exchange. (an Exchange is meant to designate National Exchanges as well as proprietary alternative trading systems that match buy and sell orders at specified prices).  The only path that will be available for the communication of these orders to the trading computers will be through this device.  The device will establish a queue of these orders which will be separated by asset and trade type.

Periodically, at intervals determined by algorithms set by the Exchanges, the trade communications gathered during each if these time intervals (Queue Interval) would be arranged in a “Fairness Sequence” which would also be determined algorithmically by the exchange.  The communications would then be released in this sequence, to the trading exchanges for action.  It is envisioned that the Queue Interval could be relatively short, perhaps approximately one second, to achieve the fairness desired, while not hindering market operations.

The Gateway Device would accumulate all communications to an audit file which could then be subject to regulatory oversight and also used for fine tuning the Fairness Sequence and Queue Intervals.  The Fairness Sequence algorithm and Queue Intervals would be made available to the public so that confidence can be assured.

The introduction of such devices will eliminate the ultra low latency, collocation, high frequency trading abuses now rampant.