LSE to launch new platform for derivatives

THE London Stock Exchange (LSE) has announced that it will launch a pan-European derivatives trading platform in the second quarter of 2011.

The move comes after rival trading platforms stole market share, in part due to regulatory changes following concern about competition.

In February, LSE bought the high-frequency trading platform Turquoise as part of its response to changing demand. Turquoise, which uses technology from LSE-owned company Millennium IT in October, will form the basis of its new platform.

Turquoise suffered a blow to its reputation earlier this month when the Millennium IT system it uses was taken out for two hours by suspected sabotage.

The incident forced LSE to put back the move-over of the main market onto the Millennium IT system, but the firm insists that it has not affected its plans for the Europe-wide derivatives platform: “This was an isolated incident and, although a thorough investigation is ongoing, it is clear that it was unconnected to the functioning of the trading platform itself,” the company said in its third-quarter results statement.

Overall, analysts were cautiously positive on LSE’s earnings. Its six-month pre-tax profit was up 26 per cent to £100.2m. Revenues from primary capital markets were up just one per cent on last year, to £297.9m, and revenues from cash equities in the UK fell 18 per cent to £44m.