News

London Stock Exchange could soon ditch core trading platform

Karl Flinders

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."


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