London Stock Exchange picks MillenniumIT as TradElect replacement

The London Stock Exchange (LSE) is buying a Sri Lankan-based technology services company MillenniumIT for $30m as part of its plan to migrate to a new trading system and bring tech knowledge back inside the company.

In June this year the LSE revealed it was reviewing its technology strategy, with its TradElect trading platform under particular scrutiny. TradElect was introduced in June 2007, the culmination of a four-year technology roadmap for the LSE which cost around £40m.

The LSE said it will begin moving its clients to MillenniumIT's trading system from the end of 2010, replacing TradElect, Infolect and other interfaces.

The LSE said the acquisition of MillenniumIT will cut its IT development and operational costs, saving at least £10m per year from 2011.

London Stock Exchange (photo credit: jam_90s via Flickr.com under the following Creative Commons licence)

The exchange said the new platform will allow it to improve its functionality, in particular for Italian clients, with the possibility of accommodating both trading after hours and stop loss orders.

CEO of the LSE Xavier Rolet said the deal allows the group to implement a more agile and efficient IT capability for future business development "as well as running a new cash trading platform which will provide substantially lower latency, significantly higher capacity and improved scalability".

LSE director of information and technology David Lester said that as well as serving existing and new clients, MillenniumIT will be the group's in-house software development team, "gradually replacing our current suppliers and bringing intellectual property and know-how fully within the company".

Lester said the transition will be carefully managed, and further enhancements to the existing TradElect system are planned in the interim.