London Clearing House to overhaul IT systems

London Clearing House is replacing its back-office IT infrastructure.

London Clearing House is replacing its back-office IT infrastructure.

Java-based architecture will support new hardware and software from a number of suppliers in a three-year project worth tens of millions of pounds.

LCH acts as a central counterparty, clearing trades for exchanges including the London Stock Exchange, Euronext.Liffe and the London Metal Exchange.

In 2002 the London Clearing House cleared 370 million contracts with a face value of about £150 trillion. The project will be one of the biggest of its kind in the City of London over the next few years and follows LCH’s merger last month with its Paris-based counterpart Clearnet.

The new back-office hardware and software is understood to be based around the Java development standard J2EE. Customers such as investment banks and brokers will access LCH services via a web browser.

Four main suppliers – Hewlett-Packard, BEA, Oracle and ATOS Origin – will help the LCH design the new IT infrastructure and replace 30 systems.

“We are updating our legacy systems structure so as we integrate the two companies [London Clearing House and Clearnet]. There will be a single user interface through which all business will come,” said a LCH spokesman.

Dominic Connor, head of IT at King and Shaxkson bond brokers, said reliability would be central to the new system’s success. “You need highly reliable hardware and software and people who can bring a system up very quickly if it crashes,” he said.

Alan Banks, vice president of northern Europe for BEA Systems, which is supplying its enterprise integration software, EAI and Weblogic platform 8.1, said a rigorous testing regime would be a key part of the project.

“Testing is one of the biggest areas,” he said. “If anything goes wrong with the system the City pretty much stops.”

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