London exchange promises no Tokyo-style crash

The London Stock Exchange has said it is confident about the robustness of its trading platform following last week’s crash on the Tokyo exchange, which stopped trading in stocks and bonds for more than four hours.

The London Stock Exchange has said it is confident about the robustness of its trading platform following last week’s crash on the Tokyo exchange, which stopped trading in stocks and bonds for more than four hours.

The Tokyo crash was the most serious since the exchange replaced floor trading with an all-electronic trading system in 1999.

Tokyo’s trading system was supplied by Fujitsu, which recently undertook a software upgrade to tackle an increase in the market’s trading volumes. The upgrade is believed to be linked to last week’s systems failure.

The LSE's trading software is developed in-house, though the build is outsourced to Accenture.

Unlike the Tokyo exchange, which lacked a back-up system, the LSE said it had “a fully redundant back-up system for all mission-critical applications”.

The LSE said it has a “very comprehensive” business continuity strategy in place, including a dedicated team within the exchange that looks after continuity for all aspects of the business”

The Sets trading platform in London is due to be replaced in 2007, after more than a year of testing on the replacement system. An LSE spokesperson said it remained confident that its testing procedures were robust enough to guarantee the resilience of the new trading system.

The UK Competition Commission gave the go-ahead for potential bidders for the LSE last week. Any takeover could see the exchange’s Sets system or its replacement platform junked in favour of the successful bidder’s platforms.

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