LSE to rent space on e-trading system

The London Stock Exchange (LSE) has claimed that a £12m upgrade to its electronic trading platform will give it the capacity to rent out space to other exchanges.

Speaking exclusively to vnunet.com, LSE chief information officer David Lester said that the exchange wants to use the extra capacity to boost revenues by building on the £11m deal with the Johannesburg Stock Exchange (JSE) last year.

Under that five-year deal the JSE will move onto the LSE's Stock Exchange Electronic Trading Service (Sets) in May this year.

"We are looking to sell more of these deals on an application service provider [ASP] model and we are in talks with a number of other exchanges," said Lester.

The move comes on the back of the Sets upgrade completed in December which involved the LSE moving from Tandem K to Tandem S series hardware.

The upgrade has tripled the trading capacity of Sets, although the LSE is currently only using 20 per cent of available capacity, explained Lester.

It was the biggest part of a long-term strategy to increase the trading capacity of Sets by eventually moving to hardware based on Intel's 64-bit Itanium processor.

"It gives us an upgradeable path for Compaq's architecture to the Itanium chip. Now we can just upgrade the processors in the system. We have done the big hop from K to S so it is just little hops left," said Lester.

"The final move to Itanium will be driven by the London market's own requirements, new products, and other ASP deals."

The other major IT project for the LSE this year is the replacement of its proprietary X.25 network with an IP system that will speed up communications with customers and allow new trading, settlement and information services.

The multi-million pound deal was outsourced to WorldCom last year and is currently at the pilot stage. Lester said that customers will start to be moved onto the IP network from March this year through to 2003.

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