The London Stock Exchange (www.londonstockexchange.com) is hoping for some love from fickle traders, by announcing 14 February – Valentine’s Day – as the date to switch to anew system for its main SETS trading platform. The switch was delayed after a 2-hour outage on 2 November on the LSE’s Turquoise pan-European multi-lateral trading facility, which was already using technology provided by MillenniumIT. See our previous post on the London Stock exchange outage.
The LSE blames the outage on “human error”, according to a report in the Financial Times newspaper today (12 Jan).
That will be good news for Millennium IT (www.milleniumit.com), a Sri Lankan software company which the LSE acquired in 2009. MillenniumIT’s trading and central depository systems are already in use in many exchanges across Africa (as reported on our blog last October) and its influence is likely to grow.
Turquoise had gone live with the Millennium Exchange trading system in October 2010 and the LSE’s main platform was due to switch early in November, until the outage. The LSE press release in November hinted at sabotage: “Preliminary investigations indicate that this human error may have occurred in suspicious circumstances.” The FT reports this seems to be off the agenda after an internal inquiry.
The LSE is migrating its main trading platform, TradElect, to faster systems designed by MillenniumIT as part of a race to keep up with other exchanges that are taking market share by luring high-speed, computer driven equity traders. In an analysis article today the Financial Times reports that Chi-X Europe and other new platforms such as BATS Europe have taken 48% of the trading in the FTSE 100 list of large companies, according to data from Thomson Reuters. The LSE says its share is 58%.
Last October 2010, Turquoise announced on a website “it is now the fastest trading platform in the world. The average order entry latency on Turquoise’s new ultra-low latency trading system, developed by MillenniumIT, is 126 microseconds, twice as fast as Turquoise’s main international competitors on a like for like basis. 99.9% of all customer orders on the new system are accepted, processed and acknowledged within 400 microseconds.”
South Africa’s JSE, the Namibian Stock Exchange and Norway’s Oslo Bors are all exchanges which use TradElect because of links to the LSE, and could switch to MillenniumIT trading platforms in 2011.
Millennium IT has also supplied trading systems to the securities exchanges in Kenya, Mauritius, Tanzania and Zambia, and central depositories and settlement systems in Botswana, Ghana, Kenya, Tanzania, Uganda and Zambia, among others.
The dynamic Stock Exchange of Mauritius (www.stockexchangeofmauritius.com ), among the continental leaders in IT, has long promoted MillenniumIT trading and central depository systems. In addition to powering its own markets, SEM has also advocated them on other projects in which it has been involved, such as a central African regional exchange (which did not end up using Millennium IT), also Nairobi, Dar es Salaam, Botswana, Lusaka and the Bank of Ghana CSD.
In particular, MillenniumIT’s Smart Order Router system could support the hub-and-spoke model that is adopted by the Committee of SADC Stock Exchanges. Preparations are done and this is ready to move fast once funding is approved. The model can allow exchanges to continue to regulate their brokers and other institutions, as orders can be routed through local broking houses.
MillenniumIT also won the project for linking the East African Securities Exchanges and helping solidify the East African common market for capital but this too is awaiting funding.
Jit Seneviratne, Head of Business Development, told AfricaCapitalMarketsNews last year: “MillenniumIT sees a major role for itself in integrating African capital markets and we will use our technology to facilitate this. It certainly helps that we are already powering several exchanges in Africa… We have already identified the manner in which the links can be done.
“The only challenge if at all, is not in the trading but the clearing and settlement of pan African securities, but we have a plan for this as well.”