The London Stock Exchange (LSE) has recouped the £40m cost of
its
electronic trading platform in under 12 months, using the
technology to drive up its trading volumes.
The Tradelect platform has helped the LSE increase electronic
trading by 82% and to grow profits by 52% to £265.2m over the past
12 months, the LSE revealed when it announced its prelimary results
on 22 May.
David Lester, CIO at the LSE, said the company plans to continue
to invest in Tradelect, which was launched in June last year, to
increase trading volumes further.
The exchange plans to quadruple the average number of messages
its trading platform can process in the next six months. The number
of messages processed by Tradelect will double to 10,000 in
September when it completes the integration of
Milan-based Borsa Italiana, which it acquired last year for
£1.63bn. It plans to reduce the time taken to complete a trade from
six milliseconds to three milliseconds by the end of October,
doubling volumes again.
Lester said the LSE had reduced the cost of increasing
Tradelect's capacity using off-the-shelf hardware from HP and
Intel. "HP and Intel invest in new technology, which we can use to
make us faster," he said. The exchange uses modular in-house
middleware, which it can re-use and adapt to take in new business
models.
It would be more challenging to do the upgrades if the software
or hardware were proprietary, he said.
The number of trades an exchange can process has a direct impact
on its attractiveness to investors. Higher trade volumes boost
profits for the stock exchange and provide it with more market data
to sell to investment companies - a major part of its income.
