TradElect

TradElect
Developer(s) Accenture
Initial release June 2007
Last release
? / February 2011 (2011-02)
Operating system Microsoft Windows
Platform .NET
Type Electronic trading platform

TradElect was the London Stock Exchange's main electronic trading platform from 2007 to 2011. It ran on Microsoft Windows, using .NET technology and Microsoft SQL Server. Its development took 4 years from project inception to rollout and had a total cost of £40m.[1]

The impetus for the development of TradElect was the rise of algorithmic trading[2] and the liberalisation of the trading sector in Europe due to the Markets in Financial Instruments Directive.[3] Both of these factors meant that stock exchanges - previously facing little or no competition[3] - had to offer faster response times to be competitive. The system which TradElect replaced, Sets, was 10 years old and took 140ms to complete a trade, compared to TradElect's 10ms.[4]

In April 2010 the Oslo Stock Exchange also adopted TradElect,[5] as part of a strategic partnership agreement.[6] The Johannesburg Stock Exchange also adopted TradElect.

Downtime

On 8 September 2008, TradElect trading was mostly unavailable for over 7 hours, on what the Wall Street Journal described as a "huge trading day".[7] Traders walked out of the London Stock Exchange in protest.[8] Another major technical fault had occurred less than a year earlier.[7]

The London Stock Exchange claimed that the TradElect software was not to blame, instead blaming an unspecified fault with "network software".[9] However, Celent analyst Cubillas Ding noted that this outage, and three previous ones, all coincided with large spikes in trading volumes, from different economic events, and concluded that the LSE's technology could not cope with the high trading volumes.[10]

Microsoft had previously used TradElect as a case study in marketing material to position its Windows operating system as suitable for "highly reliable" systems. It did not respond to requests for comment.[11]

Successor

In May 2009, the London Stock Exchange gained a new CEO, Xavier Rolet, who set about reviewing costs and cutting jobs. Only two years after TradElect had first gone live, the London Stock Exchange decided to scrap it and replace it with something else. The LSE investigated the possibility of building a new system in-house, but eventually decided on acquiring the existing, Linux-based system, Millennium Exchange, which had a lower, sub-millisecond latency.[1] It acquired this system by acquiring the company that created it, MillenniumIT, in 2009, for £18m.[12] In its annual report, the LSE said that it expected the switch to Millennium Exchange to save $16m per year starting from the 2012 financial year.[10]

By 2011, TradElect had been completely replaced with Millennium Exchange at the London Stock Exchange.

The Oslo Stock Exchange[13] and the Johannesburg Stock Exchange also switched to Millennium Exchange.

References

  1. 1 2 "London Stock Exchange to replace Tradelect with Millennium". Computer Weekly. 4 September 2009. Retrieved 19 October 2013.
  2. ↑ Alistair Mcdonald (19 June 2007). "LSE Puts Its Stock in Speed". Wall Street Journal.
  3. 1 2 Karl Flinders (29 June 2009). "Will London Stock Exchange scrap Tradelect?". Computer Weekly. Retrieved 19 October 2013.
  4. ↑ Phillip Inman (9 September 2008). "Computer crash brings LSE to a standstill". The Guardian.
  5. ↑ "Oslo Børs may face further tech change after TradElect shift". The TRADE News. 13 April 2010. Retrieved 19 October 2013.
  6. ↑ "Oslo Børs and London Stock Exchange Group agree strategic partnership". Oslo Stock Exchange. 12 March 2009. Retrieved 19 October 2013.
  7. 1 2 Shah, Neil; Mollenkamp, Carrick (9 September 2008). "London Exchange Paralyzed by Glitch". Wall Street Journal. Retrieved 19 October 2013.
  8. ↑ Leo King (30 June 2009). "London Stock Exchange to dump £40m TradElect - reports". Network World. Retrieved 19 October 2013.
  9. ↑ Leo King (10 September 2008). "London Stock Exchange confirms network software caused costly outage". Computer Weekly. Retrieved 19 October 2013.
  10. 1 2 Maria Korolov (14 December 2009). "Clock is Ticking on London Exchange". Securities Technologies Monitor. Retrieved 19 October 2013.
  11. ↑ Jeff James (10 September 2008). "The London Stock Exchange Crash: Who Was to Blame?". Windows IT Pro. Retrieved 19 October 2013.
  12. ↑ "London Stock Exchange Group to Acquire MillenniumIT for US$30M (£18M)". London Stock Exchange. 16 September 2009. Retrieved 19 October 2013.
  13. ↑ http://www.oslobors.no/ob_eng/Oslo-Boers/Trading/Delta/Millennium-Exchange
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