The London Stock Exchange is using
a technology it bought last year to offer clearing services for
UK-traded stock.
The company has been considering
alternative clearing systems since the Financial Services
Authority (FSA) set a precedent when it gave approval for
IntercontinentalExchange to run its own clearing system in
London.
The new service will use the X-TRM technology, acquired from
Borsa Italiana in June 2007 when it bought the Milan-based
excahange for £1.63bn. The technology routes trades from the the
Tradelect core trading platform to clearing services.
The London Stock Exchange currently
subcontracts its clearing to LCH.Clearnet. X-Clear, a clearing
service based in Switzerland, will run alongside it to offer a
choice.
Speaking to Computer Weekly in June, following the FSA's
decision, a spokesperson for the London Stock Exchange said the
firm was "exploring the whole clearing issue in depth, taking into
account the recent changes in the landscape."
The exchange is under increasing pressure from new entrants to
the trading sector. These companies,
including Turquoise and Chi-X, are taking advantage of the
market liberalisation created by the Markets in Financial
Instruments Directive. This EU law came into force in November
last year.
Bob Mcdowall, said the London Stock Exchange needs to increase
its services. "It has to spread its revenues and portfolio of
services. Using technology it acquired is a good idea because it is
putting it to revenue generating uses."