London Stock Exchange reportedly to dump £40m platform

New CEO Xavier Rolet is reviewing costs and cutting jobs

The London Stock Exchange may dump its £40 million electronic share trading platform TradElect and cull IT staff, as the new chief executive reviews costs. The platform, only updated a year ago by Accenture, could be switched off, according to reports.

The LSE "appears set" to dump the technology, the Financial Times reported. But the LSE declined to elaborate on the article, when contacted for further information by Computerworld UK.

Dropping TradElect would be a dramatic about-face for the exchange, which had heavily promoted its ability to rival newer, dedicated electronic exchanges, and plumbed millions of pounds into doing so. It runs on HP ProLiant Servers and Microsoft .Net and SQL Server 2000 systems, and within a Cisco network architecture.

The project to upgrade the technology was led by Clara Furse, the bourse's former chief executive.

New CEO Xavier Rolet, who replaced Furse as CEO last month, is reviewing costs and cutting jobs. Some 120 roles will be done away with in London this week.

Scrapping the TradElect system could also put more IT positions in London in doubt.

A spokesperson at the LSE said the exchange "always reviews" its technology and that it could still assess new systems for electronic trading.

In a statement, the exchange said: "With a new CEO at the helm, LSEG (LSE Group) has been reviewing its operational structure and has identified changes to how it organised.

"Inevitably, these changes will lead to job losses as well as new opportunities for some staff," it said.

But a change of central technology would remind City traders of the exchange's "often troubled relationship" with IT, the FT commented. It blamed the exchange for "relying" on consultants to build and maintain its systems, citing the exchange abandoning a prior platform in 1993.

The London Stock Exchange spends nearly half of its costs on technology, as it fights electronic trading specialists such as Chi-X.

It experienced serious problems with electronic trading last September, when network software problems took TradElect offline for a potentially devastating seven hours.

At the time, angry traders walked out of the building in protest, unable to conduct business on what would have been one of the best days for the market as stocks rallied immediately after the bail out of US mortgage lenders Fannie Mae and Freddie Mac.

In a separate note, the LSE announced today that it had received regulatory approval from the Financial Services Authority for Baikal, a trading platform offering anonymity to traders so that their strategies remain secret. The "dark pool" venture was originally kicked off with Lehman Brothers as partner , the investment bank that collapsed spectacularly last September. Now, almost a year on since it was announced, the LSE has commenced a phased rollout of Baikal.

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Tags london stock exchangeTradelectLSE

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