Upgrade lifts Stock Exchange trading

New platforms increase trading capacity six times over

IT fundamental to LSE's performance

The London Stock Exchange (LSE) has highlighted the increasingly crucial role that technology will play in the company’s future in its interim financial results, reported last week.

The Exchange has spent nearly £150m over five years developing its core technology platforms, increasing its trading capacity six-fold and reducing the time taken to transmit information.

LSE chief information officer David Lester says the company’s technology roadmap – now nearing the end of year three of a four-year programme – supports the Exchange’s business in several key ways.

Adding capacity and increasing the system’s speed directly translates into financial benefits for the LSE as a whole, he says.

‘Since we doubled the capacity of our core trading platform we have recorded six of our best-ever business days,’ he said.

‘There appears to be a direct correlation between upgrading capacity in our system and actual usage of the market.’

When completed in early 2007, the roadmap is expected to cut 20 per cent off the Exchange’s annual £40m IT costs.

‘We can now scale our information platform, Infolect, at a tenth of the previous cost,’ said Lester (Computing, 27 October).

‘We estimate that when we get our new trading platform in place, we should be able to scale it at a fifth of the cost.’

And faster systems convert more orders into completed trades, which boosts revenue.

‘The latency with Infolect has gone from 30 milliseconds on average across the day down to just two milliseconds, so that’s 15 times faster,’ said Lester.

‘The Exchange makes more revenue when a trade executes than it does when an order is entered into the platform. Less latency is good for customers who get more trade certainty, and it is good for the LSE by generating more trade income.’

The new technology platform also allows the LSE to create a wider range of products and services, while cutting the time it takes for development.

‘Technology enhancements underpin our expectations of a continuation of this strong performance,’ said LSE chief executive Clara Furse.