The London Stock Exchange will face increased
competition to its commercial data service for investment firms as
competitors unite to create a rival service.
Multilateral trading facilities (MTFs) including Equiduct,
BATS Europe and Chi-Xhave joined to create a new data service.
The companies are also in discussions with alternative trading
platform Turquoise, which is considering joining the service.
Trading venues make money by selling market data to traders, who
use it to make investment decisions.
In 2006 the London Stock Exchange made 30% of its revenue, worth
some £106m, from market data. It uses a system based on Microsoft
.net and SQL Server 2000, known as Infolect, which receives data
directly from its
Tradelect core trading platform to generate and sell market
information.
Yann L'Huillier, chief technology officer at
Turquoise, said the company is in discussions about joining the
new group.
He said Europe needs to follow the US and have data available
from all trading venues available in one place. This is known as a
consolidated tape.
Currently traders pay for consolidated data feeds from firms
such as Reuters.
"This would be a small IT project and the [thrust of the]
project would be more to do with how to govern it," said
L'Huillier.
Other competitors in this area include
Project Boat, which has been developed on the back of the
Markets in Financial Instruments Directive by a consortium of
banks.