London Stock Exchange faces new competition


London Stock Exchange faces new competition

Karl Flinders

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.

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