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08 Oct 09

London Stock Exchange Summary

  • London Stock Exchange

    Updated: 18 October 2006

    As part of its strategy to win more trading business and new customers, the London Stock Exchange needed a scalable, reliable, high-performance stock exchange ticker plant to replace its earlier system. Roughly 40 per cent of the Exchange’s revenues are generated by the sale of real-time information about stock prices. Using the Microsoft® .NET Framework in Windows Server® 2003 and the Microsoft SQL Server™ 2000 database, the new Infolect® system has been built to achieve unprecedented levels of performance, availability, and business agility. Launched in September 2005, it is maintaining the London Stock Exchange’s world-leading service reliability record while reducing latency by a factor of 15. Its successful implementation, with support from Microsoft and Accenture, shows the London Stock Exchange’s leadership in developing next-generation trading systems.

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Tim Anderson’s ITWriting - Tech writing blog » London Stock Exchange migrating from .NET to Oracle/UNIX platform

  • One of the main reasons is that trading platforms are a competitive marketplace now. They now compete based on latency more than all else. Speed of execution wins. The reason this is especially relevant is due to High-Frequency Traders. They are the new market makers (what used to be the people screaming at each other on the floor of exchanges). High-Frequency Trading are computers trading with each other. This is why within the U.S., you see a war going on between electronic exchanges, and their rebates (exchanges paying HFT for trading on their markets, note this only applies to market suppliers, buyers still have to comply with NBBO).


    The problem is that the LSE has been executing prices at above 25ms slower than other exchanges, sometimes to the point where it’s faster to execute in exchanges further away. If they’re that slow with execution, trading volumes will be going to other exchanges, notably Euronext. These slow speeds, probably due to the way .NET is structured, and Windows’ opaque network stack is killing them competitively (as opposed to *NIX where one can intuitively know where the buffering is — and minimize that). The real failure here isn’t Microsoft, is Accenture and LSE for throwing in people that have no idea the modern demands and throwing out the tried and true.

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