Sri Lankan vendor MillenniumIT has emerged as the surprise favourite to provide the replacement for the London Stock Exchange's TradElect platform.
Since introducing the £40 million TradElect platform in 2007, the LSE has come under increasing pressure from new, fast, MTFs such as Chi-X, Bats Europe and Turquoise.
Over the last few months, the exchange's new CEO, Xavier Rolet, has been looking at possible replacements that can offer faster trading and handle greater numbers.
TradElect currently offers a sluggish trading speed of 2.7 milliseconds, and Rolet says he wants to cut this to less than one millisecond. Chi-X has an average trading speed of 0.4 milliseconds.
According to ComputerWeekly, MillenniumIT - which counts the London Metal Exchange among its customers - has already won the contract.
However, the LSE has refused to confirm this and Rolet has told the Financial Times that he is looking at a variety of options, including cooperation with another exchange, licensing technology from other bourses and acquisitions.
A final decision is expected to be made this month, with MillenniumIT thought to be one of four shortlisted options.
Rolet told the FT: "We have to [upgrade] because the technology specifications are no longer competitive and that's impacting our ability to support volume growth."
London Stock Exchange to replace Tradelect with Millennium - ComputerWeekly
LSE targets upgrade to move ahead of rivals - FT