Stock Exchange gears up for the future

For traders time really is money. And so the London Stock Exchange is relying on the strength of its IT systems to help dealers trade faster and for longer.

The Exchange will handle deals worth £5.8tr in the course of this year and its CTO Robin Payne reckons that amount can only go up, as more trading leads to lower trading costs and - in a virtuous circle - to more trades being carried out.

As well as more trading, longer trading hours are on the cards too. Payne predicted that "sometime in the future" 24/7 trading will become a reality, although he expects the LSE will soon have to cater to a working week of five eight-hour days.

The LSE also wants to sell its tech capacity onto other, smaller exchanges around the world: "There are a number of tier two, tier three exchanges which would clearly never contemplate building this technology from scratch... We join forces - the cost base goes down and volumes go up."

The LSE is already using this model with the Johannesburg exchange. This boosts trading volumes for the LSE, whilst allowing Johannesburg to run high-end trading services without having to stump up for the infrastructure itself.

To support further potential growth the tech team is also looking to add multi-currency support to its list of services.

Providing the engine for these expansion plans is a refreshed tech infrastructure.

The LSE is in the third and final wave of tech overhaul, started three years ago, with a brief to update the company's systems, increase uptime and agility, and lower total cost of ownership (TCO).

Payne said: "Our technology strategy is absolutely aligned with our corporate strategy."

Among the changes that have already taken place is the introduction of the Infolect ticker system, which feeds real-time prices around the world.

The system went live last year and, according to Payne, delivers prices with a delay of around two milliseconds - compared to its predecessor, with on average 30 milliseconds.

Cutting down the latency will in turn cut down the price traders see and that they can actually use. He added: "Milliseconds really really matter to our market."

The Exchange is also working to cut the total cost of ownership of its systems by 20 per cent. One element of this has been the switch from Cobol to .NET, which the LSE's CTO says will make it easier to use offshore software development.

The LSE has also switched to using AMD's Opteron processors for its servers, which will power the new trading platform the Exchange will launch next year.

Paine says the dual-core chips will help with issues of power and heat distribution as well as fit in better with the company's technology road-map. "AMD is more closely aligned with those characteristics and the TCO challenge," he said.