LSE to introduce global securities numbering system
07 November 2002 | 3471 views | 0
The London Stock Exchange is to introduce a new global numbering system for securities in a bid to reduce the number of failed cross-border trades.
After extensive discussions with users and vendors, the Exchange says it will update its existing seven-character numeric Sedol code to alphanumeric for introduction in 2003.
David Lester, the Exchange's chief information officer, says: "This new system will allow us to provide a unique global security identifier to address market needs, and enable the Exchange to build on our position as a provider of the established Sedol standard."
Failed cross-border trades cost the global securities industry around £800 million every year. It is estimated that £125 million of this loss can be linked directly to problems identifying the securities involved in cross-border transactions.
These include existing systems being unable to provide codes quickly enough in the trading cycle, as well as difficulties providing codes for those with multiple listings.
In today's interim results announcement, the Exchange said that Information Services accounted for £50.7 million of its turnover in the first half of this year. Instrument numbering, together with the recently-announced Corporate Data Warehousing initiative, are part of Exchange's strategy to diversify the range of commercial products and services it offers to its customers.
More broadly, first half earnings at the LSE rose by 17% over the year ago period, but the market downturn reduced the number of terminals in use to 100,000 at the end of September, down 5000 during the half-year and down from 109,000 a year earlier.