Andersen Consulting to benefit from stock exchange link-up

Andersen Consulting is tipped to land a lucrative deal for developing an electronic trading system for the integrated UK and German stock markets.

The London Stock Exchange (LSE) and the Deutsche Borse stock markets yesterday announced a decision to develop a common electronic trading system within the next 12 months.

The chief executives of the two organisations said they share middleware from the same software house, and expect the integration of their existing electronic dealing systems to prove straightforward.

An LSE spokesman said: "Andersen Consulting was brought in to develop the LSE Sequence Programme, which included the LMIL output engine - a distribution mechanism for the dealer system - and the trading engine, which controls quoting and ordering. The Deutsche Borse studied this system and then decided to contract Andersen to construct its Xetra dealer system."

The spokesman confirmed Andersen has been included in preliminary discussions, but has not been given a formal invitation to tender.

One dissenting voice said Andersen might encounter problems. A source close to the situation said: "The fact that the two exchanges said that they are going to develop a next-generation bespoke dealer system indicates that the existing systems may not be as good at talking to each other as they would like us to think.

"In any case, the system they are proposing deals with execution of a trade, but not the clearing process. Clearing is a very important part in any linkage. It's about where the money is."