Xavier Rolet, chief executive at the London Stock Exchange, has hailed the “successful” migration of its technology to the new Millennium Exchange platform, following several weeks of severe problems.
"I am pleased with the progress we are making to deliver on our strategic objectives,” said Rolet today, as the LSE highlighted a two percent increase in trading value over the last eleven months.
“Notable recent developments”, he said, include “the successful migration of UK cash equities trading to the Group's MillenniumIT trading platform”, which was showing a “substantial uplift in performance” from the previous TradElect system.
But after the February launch, which was highly complex and followed 15 months of testing, LSE data vendors – which provide share price data to traders – found that for several weeks they were displaying incorrect or blank prices.
The LSE then called an emergency meeting with its largest vendors – including Thomson Reuters, Interactive Data and Morningstar – to address the problem. It took away a key closing price requirement to help the struggling vendors, as they implemented major workaround code fixes. Market sources have said there may have been mistakes made by both the exchange and the vendors.
The exchange also experienced a four hour outage one month ago, but has consistently declined to explain the technical reason for the problem apart from describing it broadly as a “data dissemination issue”. Today, the LSE again declined to give details on the outage.
Trading customers and technology partners of the exchange have since told Computerworld UK of their immense frustration over the lack of clarity around the events. It is understood that Xavier Rolet has personally met some of the LSE’s largest trading customers in order to give some assurance that the problem is fixed.
The migration was significant and was described by industry observers as one of the LSE's most important technological developments since the increasing prevalence of electronic trading led to the closure of the traditional exchange floor in 1986.
It involved the LSE abandoning the troubled TradElect system, written in .Net and built by Accenture, running in a Microsoft Windows Server environment on HP ProLiant blade servers and Cisco network switches. That system experienced a full day outage in 2007.
The LSE’s new system, Millennium Exchange, was developed in Sri Lanka and brought in house when the LSE acquired Millennium IT last year for only £18 million. The Novell SUSE Linux-based system was written in C++, though the hardware it runs on has not been publicly disclosed.
An LSE spokesperson today expressed confidence in the new system, noting that the outage had not been repeated. Factors including better scalability and capacity, low latency, and the ability to handle different asset classes are among the successes, the spokesperson said.
Financial services industry experts, however, have questioned the go-live strategy for Millennium Exchange on the LSE cash markets. While the migration was delayed several months for substantial testing and to effect capacity increases, it was switched on in a “big bang” move as TradElect was fully disconnected.
“I can’t understand why they didn’t run the systems in parallel, at least for a few weeks,” said one trading expert. “It didn’t allow for any alternative to be in place when things went wrong.”
The LSE, which once faced no UK competitors, now has around 63 percent of order book share trading. Over recent years specialist electronic trading values, including the newly merged BATS-Chi-X, have taken a sizeable portion of activity.