Flexible IT aids hostile exchange takeover

Flexible trading technology behind OM Group's hostile bid for the London Stock Exchange will minimise conversion costs for London...

Flexible trading technology behind OM Group's hostile bid for the London Stock Exchange will minimise conversion costs for London stockbrokers by integrating with its current electronic trading system.

Nick Huber

Swedish company OM Group, which supplies and manages trading technology to a range of exchanges, said its Saxess exchange system will be able to support the London Stock Exchange's electronic trading system, Sets.

OM said it would also reconfigure Saxess so that it can integrate with the Sets hardware and traders' workstations.

OM's IT pledge will be seen as an attempt to convince stock exchange members that it can avoid the multi-million-pound conversion costs that dogged the failed iX merger proposal between the London and Frankfurt stock exchanges.

The iX proposal would have forced London stockbrokers to scrap Sets and migrate to Xetra, which is used by the Deutsche B”rse market. Consultants estimated that larger London firms would have faced at least £500,000 in conversion costs.

The influential Association of Private Client Investment Managers and Stockbrokers (APCIMS) is understood to be impressed by the ability of OM Group to manage the technology trading platform.

However, sources close to APCIMS, which represents about one third of London Stock Exchange members, said it wanted more clarification over the IT conversion costs involved in the OM Group's bid.

This week, APCIMS was due to send a proposal to the London Stock Exchange calling for the establishment of a joint strategy committee, comprised of market members, to discuss the stock exchange's future.

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