London Bourse Launches Speedier Trading System
May 05, 2011
LONDON -- The London Stock Exchange next week is launching a faster and more efficient trading system that should help London be a contender in the growing competition among stock exchanges. On Tuesday the bourse will complete its Sequence Programme, a three-year project to improve the technology of its trading system. ``This program is a significant milestone for the exchange,'' said Christopher Dannette, director of business operations at the bourse. ``It will enable future changes in the market to be accomplished safely and efficiently, including the introduction of electronic trading next year. This will mean that the exchange can support a broad range of trading mechanisms, which will ensure that both London and our members retain their competitive edge.'' The new system is faster and much more efficient. It handled 120,000 quotes on a rehearsal day, more than three times the exchange's normal daily trading volume of 30,000 to 40,000 quotes. The bourse said the new technology also improved response times. Alberta Gaddy, a partner at Andersen Consulting, which has been working with the exchange on the project, said the time it takes for a quote to be entered by one trader and reach the screen of other traders is cut down to one-and-a-half seconds, compared with four-and-a-half seconds. While traders welcome the new system, they said prices won't be affected by the faster pace. ``In terms of what traders will see on Tuesday, they might see prices moving more quickly on their screens,'' said Petrina Wong, head of stock trading at James Capel & Co. in London. ``But the impact on market prices will be zero.'' He said bigger changes could happen when the exchange introduces its new software, Sequence VI, that will enable an order-driven trading system to exist alongside London's traditional quote-driven system. While this software has been tested internally and is ready to go, exchange officials said it won't be put to use until further details are developed on how order-driven trading would be carried out. The new system, called Sequence Programme because it is being delivered in separate stages, cost 81 million pounds ($125.6 million), which is below the approved budget of 85.7 million pounds.
