London Stock Exchange debuts Italian signing

The London Stock Exchange has started routing UK trades automatically to clearing services.

The London Stock Exchange has started routing UK trades automatically to clearing services.

The company is using the the X-TRM trade routing technology. It acquired X-TRM when it bought Milan-based exchange Borsa Italiana in June 2007 in a £1.63bn deal.

The move will increase "operational efficiency by ensuring that trades are routed to the [clearing] service provider LCH.Clearnet without manual intervention," said the London Stock Exchange.

The LSE is using X-TRM in conjunction with a clearing service launched for trading in certain international stocks. The LSE subcontracts this service to LCH.Clearnet.

The stock exchange has been considering alternative clearing services since the Financial Services Authority (FSA) set a precedent when it gave approval for IntercontinentalExchange to run its own clearing system in London.

It is under increasing pressure from new entrants to the trading sector. These companies, including Turquoise and Chi-X, are taking advantage of the market liberalisation created by the Markets in Financial Instruments Directive. This EU law came into force in November last year.

Speaking to Computer Weekly in June, following the FSA's decision, a spokesperson for the London Stock Exchange said the firm was "exploring the whole clearing issue in depth, taking into account the recent changes in the landscape."

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