TMX in talks to take minority stake in EDX; LSE to move derivatives platform to Sola trading engine

TMX in talks to take minority stake in EDX; LSE to move derivatives platform to Sola trading engine

The London Stock Exchange is to port its EDX derivatives market to TMX Group's Sola Trading technology and is in negotiations with the Canadian group for the sale of a minority stake in EDX.

The Sola Trading platform was initially developed by the Montreal Exchange, which was recently acquired by TMX.

The LSE says it will move EDX on to the Sola platform from its current Nasdaq OMX technology foundation in November 2009. The introduction of new trading technology will bring lower latency and richer functionality, says the LSE, providing member firms with new opportunities to develop their trading strategies and broaden their service offering through the provision of Direct Access.

The LSE took a £23.1 million goodwill impairment charge on EDX London in 2005 as the unit initially struggled to attract business from the OTC markets. At the time, the LSE said it would continue to operate the service, which it launched in 2003 with Scandinavian stock exchange operator OMX, but would not make any further investments in the venture.

More recently, the LSE held talks with a consortium of investment banks about taking over the platform for a new derivatives market venture, but the negotiations petered out.

Clara Furse, LSE chief executive, says the new partnership with TMX "offers exciting scope for developing new products, building on our recent success with our highly liquid Russian derivatives market".

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