LSE outlines TradElect upgrades

LSE outlines TradElect upgrades

The London Stock Exchange (LSE) plans to quadruple the capacity of its TradElect platform over the next few months as it looks to fend off competition from rivals entering its market.

The exchange says latency has reduced from 140 to six milliseconds and capacity has increased 10 fold since it introduced the £40 million TradElect platform a year ago.

In May the exchange posted a 56% rise in revenues to £546.4 million, whilst operating profit also jumped 56%, to £265.2 million, on the back of an 82% growth in electronic trading on Sets. But the exchange's shares have fallen by more than half in 2008, as concern mounts over the many rival platforms - such as Chi-X, Bats Trading, Nyfix, Turquoise, Plus Markets and Nasdaq OMX's pan-European bourse, looking to take advantage of the EU's Markets in Financial Instruments Directive (MiFID) and capture the LSE's market share.

The LSE is now planning a slew of further enhancements over the next 12 months, including the migration of Italian equities onto TradElect in September 2008.

The exchange says it also will double the current capacity of TradElect to 10,000 continuous messages per second in September, before upping it again to 20,000 in October. The exchange also plans to reduce end-to-end latency on the platform from six milliseconds to three milliseconds in October.

Early next year a FIX interface to TradeElect and a Fast streaming data broadcasting channel from Infolect will be launched to improve connectivity.

David Lester, chief information officer, LSE, says: "We continue to innovate and invest in further enhancements to TradElect, reducing latency and increasing capacity in order to meet developing customer needs and remain ahead of our competitors. As we grow and develop our highly liquid and efficient markets, TradElect continues to be scalable and agile in order to exploit new products and global markets."

Earlier this month the exchange went live with Performance Channels, a low-latency, high speed delivery mechanism for data distributed by its Infolect application. The system was launched to help firms deal with increased trading capacity and market data volumes following the introduction of TradElect.

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