LSE battle for market share gets tougher

LONDON Stock Exchange chief executive Xavier Rolet is facing a tough battle to end the year ahead, as upstart rivals continue to gnaw away at the institution&rsquo;s market share.<br /><br />The LSE&rsquo;s share of London trading volume stood at 64 per cent yesterday, recovering from the previous day&rsquo;s all time low of 60 per cent, but significantly down from 82 per cent at the beginning of the year.<br /><br />The exchange &ndash; which gets 27 per cent of its turnover from equity trading &ndash; has struggled to compete against cheaper and more technologically advanced rivals, which have sprung up since the EU relaxed its rules two years ago.<br /><br />Pan-European rival Chi-X has taken a significant chunk of that share from the exchange, growing its own share from 11 per cent to 22 per cent in the same period.<br /><br />The news will likely add more urgency to Rolet&rsquo;s exclusive talks to take over rival Turquoise, which holds a six per cent share.<br /><br />The LSE said yesterday that it does not get too bogged down by daily changes in the market shares, but highlighted that it remains &ldquo;focused on offering deep and liquid markets&rdquo; and on developing its offering.<br /><br />Rolet, who took up the top position at the exchange in May, has vowed to be &ldquo;offensive, not defensive&rdquo; in the fight against new platforms.<br /><br />The Frenchman confirmed last week that the group is in exclusive talks to buy Turquoise, the platform backed by nine investment banks. The deal would give the LSE access to faster, cheaper technology than it already has, a benefit it could use to lure the market back.<br /><br />He also plans to introduce LSE-owned Borsa Italiana&rsquo;s clearing house, CC&amp;G, into the UK market to reduce the cost of clearing equities, which he said is &ldquo;the number one impediment to building back our market share&rdquo;. Last month, it acquired Sri Lankan technology firm MillenniumIT in an &pound;18m deal, also aimed at reducing costs.