Linux trading system to save London Stock Exchange money

The London Stock Exchange has said its new open source-based trading system will save it at least £10 million annually, as well as driving new business.

Millennium Exchange, a Linux and Sun Solaris Unix-based platform, which uses Oracle databases, is being rolled out across all of the LSE's electronic trading systems, replacing the slower TradElect platform, which is Microsoft .Net based. TradElect had suffered a series of high-profile outages and will be replaced by Millennium Exchange in stages from September.

The LSE took on board the new system when it acquired Sri Lankan technology firm MillenniumIT eight months ago for £18 million. As the group today said annual operating profits had fallen 18 percent to £280.3 million, which it attributed to a challenging economy and increased competition, it booked £25.3 million depreciation costs on TradElect.

LSE chief executive Xavier Rolet today said "further savings" from the system would be "forthcoming" over time, as time-to-market for new products is slashed, functionality extended, and development and ownership costs cut.

"As well as providing the Group with a new, high performance, scalable trading platform for our cash equities markets, MillenniumIT brings us our own in-house software development capability with dedicated R&D [research and development] resource," he said.

The LSE was driving to increase its scope of activities, with MillenniumIT "integral" to this, Rolet said. "As well as providing cost effective trading platforms, MillenniumIT will be used to deliver market surveillance, ticker plant, desktop services, smart order routing and post trade technology."

The group's acquisition last year of a majority stake in Turquoise, an anonymous or 'dark-pool' trading venue, was also highlighted by Rolet as a crucial step. "As the majority shareholder, we will ensure that the pan-European platform is neutral, efficiently run, open to the broadest pool of clients and develops services on an international scale," he said.

Turquoise will also move to the Millennnium Exchange systems, and away from the Cinnober Tradexpress platform, which is Java-based. It will migrate in August or September, with a "big bang" approach, as services across the Integrated and Dark Midpoint order books commence trading on the same day. Testing is currently taking place.