LSE puts new trading system into action


The London Stock Exchange overcame recent glitches and rolled out its new super-fast share trading system, just as rivals Deutsche Börse and NYSE Euronext prepared to seize the limelight with their £15bn merger.

brokers on the trading floor

Psychological boost: LSE's new super-fast share trading system is in action

LSE boss Xavier Rolet will have heaved a huge sigh of relief that the Millennium IT platform appears to have been implemented without any major hitches.

The launch was originally set for November, but embarrassingly the system crashed, causing the exchange to investigate whether it had been the target of sabotage.

It later admitted that 'human error' was responsible.

The start of the new Millennium Exchange trading system provides a psychological boost to the LSE, as it seeks to convince investors that it is doing the right thing by sewing up a £4.3bn all-share 'merger of equals' with Canada's TMX.

But Germany's Deutsche Börse and NYSE Euronext are raising the bar in terms of global exchange consolidation. Their merger is expected to be announced today.

The tie-up, if approved by regulators, brings together the world's second and third largest bourses by revenue, and will propel them to the top of the league table ahead of US exchange CME.

The LSE's planned deal with TMX would put it into fourth position (or third if the Deutsche deal gets through first).

Rolet has won friends among LSE shareholders for tightening the screw on costs and clearing up a rather messy legacy that he inherited when he took the job from Dame Clara Furse.

But with rivals moving ahead, he will be under pressure to agree to further cross-border tie-ups. The LSE said yesterday that the move of business to the new Millennium platform shows its 'continued commitment to technological innovation in the market place'.

It added that the 'migration is a crucial step forward in [its] drive to offer best in class trading services'.

The London exchange bought Sri Lankan technology firm Millennium in 2009. It believes that cutting edge IT will help it win the battle for business in a tough market where share dealing is increasingly driven by price.

The exchange's share of equity trading has been eroded by upstarts such as Bats Europe and Chi-X Europe.

LSE shares fell 3p to 930p. It is expected to look east for future alliances, with analysts pointing out that the main growth will come from fast-growing Asian countries such as China and India.

However, some experts believe it might be better placed to look at exchanges such as South Africa's Johannesburg, where it has closer historical links.