The London Stock Exchange and Tokyo Stock Exchange have announced details of a deal covering joint development of new products and cooperation over market access arrangements for member firms.
The two exchanges’ move to encourage member firms to access each other’s markets is aimed at establishing a round the clock trading environment.
The deal – the first time the two exchanges have worked together – also includes an agreement to share information on technology, as they will need to ensure their IT systems can exchange data efficiently.
Both exchanges are roiling out next-generation systems, with developments at the Tokyo exchange prompted by capacity problems with its trading system that have led to crashes and loss of trading time.
The Tokyo exchange replaced its Fujitsu trading system with a new system from Hitachi earlier this month after being forced to close trading early on several days in January. The problems followed a crash in November 2005 that stopped trading for more than four hours.
An LSE spokesperson said concerns about the Tokyo IT system were “not something we would comment on”. She added: “It’s all still at a fairly early stage. When we have more detail of what the next steps [for the agreement] are, that might be the point to ask that question.”
The LSE is testing its new Tradelect core trading platform – part of a four-year IT overhaul – with major banks and City traders. The platform is due to be launched later this year.
A task force of senior staff from both exchanges is set to identify areas for long-term joint work.
LSE chair Chris Gibson-Smith, said: “The Tokyo Stock Exchange is an immensely important global market, and we see our co-operation agreement with it as an exciting opportunity to broaden the scope of the services that we are able to offer issuers, investors and member firms.”
Tokyo Stock Exchange chief executive Taizo Nishimuro said: “Taking into consideration the environment surrounding market operators, it is critical for us to explore the possibility for satisfying exchange’s various stakeholders.”