The London Stock Exchange has started routing UK trades
automatically to clearing services.
The company is using the
the X-TRM trade routing technology. It acquired X-TRM when it
bought Milan-based exchange Borsa Italiana in June 2007 in
a £1.63bn deal.
The move will increase "operational efficiency by ensuring that
trades are routed to the [clearing] service provider LCH.Clearnet
without manual intervention," said the London Stock Exchange.
The LSE is using X-TRM in conjunction with a clearing service
launched for trading in certain international stocks. The LSE
subcontracts this service to LCH.Clearnet.
The stock exchange has been considering alternative clearing
services since the Financial Services Authority (FSA) set a
precedent when it gave approval for IntercontinentalExchange to run
its own clearing system in London.
It 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.
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."