The London Stock Exchange's Tradelect trading platform saved the exchange from a series of hostile takeovers, its CIO David Lester disclosed today.
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Speaking as the exchange confirmed its plans to replace Tradelect with a platform from Sri Lanka-based MillenniumIT, Lester said that Tradelect had allowed the exchange to stay competitive in a crowded market.
The London Stock Exchange has been the subject of hostile takeover bids by other exchanges, such as Nasdaq and Euronext, but its ability to move forward in an increasingly electronic market helped it retain its independent status, said Lester.
"Tradelect saved this business because it allowed us to process the flow of electronic trades," he said.
Tradelect, which was developed in-house using Microsoft .net technology, has not been able to keep pace with the performance of some of the exchange's competitiors.
The London Stock Exchange is now replacing Tradelect with technology from MillenniumIT, which it acquired today for £18m. MillenniumIT's core trading platform can complete a trade in about 100 microseconds compared to Tradelect's 3.7 milliseconds.
The deal also gives the exchange access to smart order routing, surveillance and information dissemination software systems.
Lester said by acquiring MilleniumIT the exchange can replace some of the technology suppliers it worked with and take control of its own destiny.
Yann L'Huillier, CTO at rival trading venue Turquoise, said Tradelect was good at the time it was introduced but its inability to change meant it was less successful in the long term.
Bob McDowall, analyst at TowerGroup, said Tradelect had been core to the London Stock Exchange's trading strategy.