AWS for Industries

How CSD BR Became the First Brazilian FMI to Migrate Highly Regulated Workloads to the Cloud

In this blog we discuss how CSD BR migrated its Trade Repository to AWS, becoming the first Brazilian financial institution to run a highly regulated workload in the cloud. By migrating to AWS, CSD BR accelerated innovation, increased scalability and lowered hosting costs.

About CSD BR

Founded in 2018, CSD BR is a Brazilian Financial Market Infrastructure (FMI) provider offering a range of services to the Brazilian financial market. CSD BR became the first Brazilian FMI to run a highly regulated workload in the cloud when it migrated its Trade Repository to AWS in 2021. The decision to embrace cloud technology for critical applications was strategic and underscores CSD BR’s commitment to supporting the expansion of the Brazilian Capital Market and driving the country’s economic development through innovative, robust, and scalable solutions.

CSD BR’s Trade Repository, Settlement System and Central Securities Depositary links market players together, reduces the complexity of transactions, and increases the transparency and security of operations. It connects to approximately 50 market participants, and processes over 3.5 million operations in an hour daily, reaching over 3 trillion operations recorded since its foundation.

The Decision to Migrate to AWS

Until 2021, CSD BR powered its operations by running on-premises solutions hosted across three interconnected data centers for data storage and processing. As CSD BR scaled, this setup proved to be increasingly complex and costly. CSD BR migrated to AWS for three main reasons:

  • Capital Efficiency: One of the more important drivers was that CSD BR aspired to be more efficient with its capital allocation and shift from heavy upfront capital expenditures to an on-demand operating expense model.
  • Elastic Scaling: CSD BR also wanted the ability to scale their platform elastically in response to changes in business needs – both intraday to manage periods of high volatility and over longer periods of time to support their business growth.
  • Innovation: Access to cutting edge infrastructure and innovative services was another important factor. AWS’s rate of innovation, from platform enhancements to launching new services such as Generative AI, has enabled CSD BR to innovate within their own business and accelerate the speed and quality of new product launches.

In addition, the shortage of talent interested in working with on-premises technology was becoming an operational concern, as technical talent is increasingly looking to build tools and solutions natively in the cloud.

Building the solution with AWS services

CSD BR uses the full spectrum of AWS infrastructure, which provides unparalleled speed, availability, performance, resilience, and security. This robust foundation supports the company’s goals and ensures seamless operation of its services.

For core compute needs, CSD BR uses Amazon Elastic Compute Cloud (Amazon EC2) because of its high availability, performance, resilience, security, and scalability, which are provided at reasonable prices. At the data layer, CSD BR developed and manages its own messaging and database applications.

CSD BR has built a resilient event-driven platform based on Kafka running on AWS infrastructure, which together with AWS Elastic Kubernetes Service (AWS EKS) enables CSD BR to have instantaneous horizontal scalability and process over 5.5 million operations in minutes when needed. This is important given the volatile nature of capital markets and the growing number of high-volume trading days.

The combination of CSD BR’s proprietary Kafka and Cassandra applications with AWS EC2 has proven powerful, resulting in a high performance, best-in-class solution with attractive financial economics.

Together with AWS, CSD BR has pioneered the connection to the Brazilian Central Bank’s national financial system network (RSFN) through Direct Connect services that allows the company to keep high performance, connectivity, and security in such a critical connection.

CSD BR has selected other AWS services, such as AWS Transfer Family for secure file exchange, Cognito for multi-factor authentication (MFA) and login management.

CSD architecture

The partnership results

The transition to AWS Cloud had excellent results for CSD BR, including:

  • High availability: with an uninterrupted service delivery, maintaining 100% uptime since migration.
  • Elastic scalability: scaling operations in line with market demands, in which CSD BR can double its capacity in a matter of seconds.
  • Cost Savings: with AWS, CSD BR cut hosting costs by over 15% compared to on-premises.
  • Higher team engagement and innovation: enabling CSD BR’s team to work with the most up-to-date infrastructure technology.

Besides the Trade Repository, the company aims to continue facilitating Brazil’s economic growth by offering a suite of post-trade market infrastructure services, including a Central Securities Depository (CSD) and Security Settlement System (SSS). We expect full regulatory approval for the CSD and the SSS in 2024 and will host both systems on AWS. CSD BR is also currently working on a range of strategic initiatives, including a Central Counterparty Clearing House (CCP), a Trading Platform for Over the Counter (OTC) fixed income and large trades, and an exchange for cash equities, future, and derivatives.

Daniel Polano Spreafico

Daniel Polano Spreafico

Daniel Polano Spreafico is a Co-founder of CSDBR leading product strategy and system development. His team leads the innovation of the company and works closely with CSD BR´s participants developing the future of Brazilian capital markets. Prior to CSDBR, Polano founded Paraty Capital, a Brazilian fiduciary administrator of investment funds company specialized in private equity funds participating in the structuring and management of various private equity and venture capital projects. He has over 18 years of experience in the financial market and has held back office and front office roles in many financial institutions.

Alex Mirarchi

Alex Mirarchi

Alex Mirarchi is a Principal Capital Markets Industry Specialist at Amazon Web Services (AWS). Alex’s core focus is helping Global Exchanges and Financial Market Infrastructure (FMI) firms transform their businesses with AWS. He leads AWS’s business development for FMIs, trading and connectivity in the cloud and also supports asset managers, investment banks, broker dealers, and fintechs in developing their cloud strategies. Alex joined AWS from Oracle Cloud Infrastructure (OCI), where he was responsible for strategy and structuring programs and strategic partnerships with Independent Software Vendors (ISVs). Prior to Oracle, Alex worked in capital markets, selling Asian Equities to Hedge Funds in London with HSBC and in New York with Macquarie Group. Alex also held front office roles in Fixed Income and Foreign Exchange and started his career in HSBC Global Asset Management’s alternative investments division in London. Alex holds an MBA from Columbia Business School and is based in New York.