LSE's MillenniumIT Buy Prompts Feed Switch

David Lester, director of information and technology at the LSE, confirms that the exchange expects to replace its TradElect exchange trading platform with technology from MillenniumIT towards the end of 2010, with the ultimate goal of moving to a common technology platform for all its markets and services-including a single trading engine, surveillance system, smart order-routing engine, desktop display technology and datafeed.

Lester adds that the move to a new technology platform is designed to support "huge volume growth" anticipated in trading-related data for European equity markets over the next five years-particularly around order updates-as increased uptake of high-frequency trading causes the European market to approach similar order-to-trade ratios as the US, which currently has a much higher quote-to-trade ratio than Europe.

And because spiralling data volumes will have to be supported by the exchange's feed technology, officials say it is unlikely that the LSE will continue to support Infolect once TradElect is replaced. In a separate interview prior to the acquisition, LSE head of real-time data Jarod Hillman said that "Logic dictates that you cannot have an old system for data distribution when you have a new trading system."

Lester declines to comment on whether the exchange will continue to support any existing datafeeds-including its Infolect Performance Channels and Service Channels feeds, and subsidiary Borsa Italiana's DDM Plus feed-once the trading platform migration is complete. The LSE had intended to retire DDM Plus this year, but extended its shelf-life following requests from customers (IMD, Aug. 10). "We kept DDM Plus because it has some pretty good functionality to do with snapshots, and it was too expensive to do that with Infolect [but] whether we do that going forward remains to be seen," Lester says.

Should the LSE retire its legacy feeds and require firms to migrate onto a new feed when the new technology platform goes live, MillenniumIT chief executive Tony Weersinghe says that the vendor's use of common data delivery standards will help to ease any migration for end-user firms. MillenniumIT's feed technology utilizes the industry standard FAST (FIX Adapted for Streaming) Protocol, which will allow firms that have already deployed feed handlers for FAST feeds from other markets to re-use those developments to capture any new feeds from the LSE, Weersinghe says.

Although officials decline to confirm the fate of the LSE's current and legacy feeds, they say it is important for all data subscribers to have a "level playing field" in terms of speed and latency, suggesting that the exchange would prefer a wholesale replacement of existing feeds rather than supporting multiple architectures with differing latency characteristics.