Turquoise could be answer to London Stock Exchange’s Tradelect dilemma

T he London Stock Exchange is looking at various...

The London Stock Exchange is looking at various ways of improving its core trading platform to make it more competitive.

In June, a spokesman at the exchange said that Tradelect brought next-generation technology to the company, butit is now considering whether to replace or upgradethe systemto keep pace with changes in the industry.

Its options include acquiring a competitor to gain new technology.

Meanwhile, one of its competitors is up for sale. Turquoise, a pan-European trading venue, has sent sales notices to potential buyersand its CEO has confirmed it is exploring its strategic options.

Turquoise, which was set up by nine investment banks, is one of the new competitors that are putting pressure on the London Stock Exchange. These companies have arisen following the introduction of the Markets in Financial Services Directive (Mifid) legislation. This law liberalised the stock trading sector and led to the creation of new trading venues.

Turquoise, under the leadership of Yan L'Hullier, has built a trading platform from scratch using off-the-shelf technology. Its core trading system uses technology from Cinnober.

Chris Skinner, CEO at think-tank the Financial Services Club, said Turquoise has struggled to take market share in comparison with the London Stock Exchange's main competitor Chi-X.

Bob McDowall, analyst at Towergroup, said Turquoise could be a good fit for the London Stock Exchange. "Turquoise is not going to get the best price at the moment and I do not think it will want a sale to be too leisurely."

He said Turquoise has customised its Cinnober platform so much that it is virtually proprietary.

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