Stock Exchange’s data challenge gets bigger

The London Stock Exchange faces more competition after Thomson Reuters launched a service to traders that provides information about all trading venues in Europe.

The London Stock Exchange faces more competition after Thomson Reuters launched a service to traders that provides information about all trading venues in Europe.

The service, which will provide share prices and trade data from all European trading venues to investment firms, will heap further pressure on the London Stock Exchange.

Thomson Reuters has launched the service to help traders cope with the fragmentation of the market since the introduction of the Markets in Financial Services Directive (MiFID) in November 2007.

This European legislation led to the creation of new trading venues and traders now have to track more price and trade information to get price comparisons.

Investment companies link to data feeds to keep their systems up to date with share prices and trading trends. This helps them offer customers the best deal available that MiFID compliance requires.

Bob McDowall, analyst at Towergroup, said traders currently rely on the London Stock Exchange as a reference point for this information. If the London exchange experiences downtime, as it did in September last year, it risks losing more customers, "When the London Stock Exchange went down, other venues could not take advantage because it was the reference point. Thomson Reuters can be a critical reference point and if the London Stock Exchange went down again it would lose more business."

Yann L'Huillier, chief technology officer at Turquoise, said Europe needs to follow the US and have data available from all trading venues available in one place.

Last week multilateral trading facilities (MTFs) including Equiduct, BATS Europe and Chi-X have joined to create a new data service. The companies are also in discussions with alternative trading platform Turquoise, which is considering joining the service.

Project Boat, is another development which has been set up on the back of MiFID by a consortium of banks.

The London Stock Exchange said it welcomed the development. “The abundance of such innovative, market level solutions, from both vendors like Thomson Reuters and exchanges such as ourselves, means that an imposed, mandatory consolidated tape, as they have in the US, is simply superfluous to requirements,” said the exchange in a statement.

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