The development of the SETS electronic order book has been central to the growth of trading activity, says the Exchange. Order book trades accounted for a record £660 billion worth of trading in 2001, passing the previous record of £531 billion set in 2000 by 24 per cent.

To stay ahead of the growth in trading volumes, SETS was transferred to new Compaq Tandem hardware in December, at a cost of £12 milllion.

David Lester, chief information officer, comments: "Our commitment to IT infrastructure investment underpins SETS' success and will enable the Exchange to bring quality new products and services to market, a number of which are already planned for 2002."

The roll out of the new IP-based network, dubbed Extranex, is intended to complement these enhancements. The Exchange has already confirmed plans to enter the newly-liberalised market for Crest network provision, in competition with incumbents Swift and Syntegra.

In its first full year as a listed company, the Exchange recorded a total of 50 million trades, 22% higher than the 41 million trades in 2000. The number of SETS trades was a record 15.9 million in 2001, outstripping the previous record of 8.6 million trades set in 2000 by 85 per cent. Trading on the electronic order book during 2001 accounted for as much as 63 per cent of the value of trades in SETS stocks in any one month. The average figure throughout 2000 was 52 per cent.

The Exchange's trading performance was also boosted in 2001 by a range of new products, including the International Order Book (IOB) and International Retail Service (IRS). The IOB introduced order driven trading for 84 of the more liquid emerging market stocks. The IRS gives retail investors access to 243 international blue chip stocks, quoted in sterling.