The London Stock Exchange's could abandon its core
trading system. Tradelect.
The platform, which has been operating for two years following
four years of planning, could be retired as the Stock Exchange
considers its options amid feirce competition, the LSE has
confirmed.
But a decision to drop the
Tradelect platform rather than upgrade it, could be a major
embarrassment, said industry observers.
A spokesman at the exchange said that Tradelect brought
next-generation technology to the company. But he said it is now
considering whether to replace it or upgrade it to keep pace with
changes in the industry.
"The question is whether we can keep competing with Tradelect,"
he said. "It did the job of keeping us competitive and giving us
next generation technology, but it is now six years since we
started on the project."
He said technology has changed a lot since then.
The project to build and implement Tradelect had four phases:
selecting and testing technology on internal systems, integrating a
system to generate real-time price comparisons from the stock
exchange, implementing a real-time surveillance system to monitor
intra-day price movements, and the introduction of Tradelect.
It was developed using Microsoft's .net framework. It replaced
the Sets electronic order book trading service, which was developed
using Cobol in 1995.
Chris Skinner, CEO at financial services think-tank The
Financial Services Club, said it would be a "major embarrassment if
they ditched Tradelect."
"It has spent millions on the system and spent a long time
planning it in a way that it could keep being developed and added
to," added Skinner. He said the CIO at the London Stock exchange
recently talked about enhancing Tradelect to increase trading
time, therefore abandoning it seems unlikely.
Competitors of the Stock Exchange
are using off-the-shelf software, which enables them to compete
quickly and gives the flexibility to make changes in response to
the changing business environment.
Bola Rotibi, principle analyst at Macehiter Ward Dutton, said
the fact that the Stock Exchange is considering what to do with
Tradelect raises questions about its architecture's
appropriateness. "Two years in operation is not a long time for a
platform like this."