TradElect was the
London Stock Exchange
London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St P ...
's main
electronic trading platform
In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Various financial products ...
from 2007 to 2011. It ran on
Microsoft Windows, using
.NET technology and
Microsoft SQL Server
Microsoft SQL Server is a relational database management system developed by Microsoft. As a database server, it is a software product with the primary function of storing and retrieving data as requested by other software applications—which ...
. Its development took four years from project inception to rollout and had a total cost of £40 million.
The impetus for the development of TradElect was the rise of
algorithmic trading and the liberalisation of the trading sector in Europe due to the
Markets in Financial Instruments Directive
Markets in Financial Instruments Directive 20142014/65/EU commonly known as MiFID 2 (Markets in financial instruments directive 2), is a legal act of the European Union. Together with Regulation (EU) No 600/2014 it provides a legal framework fo ...
.
Both of these factors meant that stock exchanges – previously facing little or no competition
– had to offer faster response times to be competitive. The system which TradElect replaced, Sets, was 10 years old and took 140 ms to complete a trade, compared to TradElect's 10 ms.
In April 2010 the
Oslo Stock Exchange also adopted TradElect, as part of a
strategic partnership agreement. The
Johannesburg Stock Exchange
JSE Limited (previously the JSE Securities Exchange and the Johannesburg Stock Exchange) is the largest stock exchange in Africa. It is located in Sandton, Johannesburg, South Africa, after it moved from downtown Johannesburg in 2000. In 2003 ...
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".
Traders walked out of the London Stock Exchange in protest.
Another major technical fault had occurred less than a year earlier.
The London Stock Exchange claimed that the TradElect software was not to blame, instead blaming an unspecified fault with "network software".
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.
Microsoft
Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washin ...
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.
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
Linux ( or ) is a family of open-source Unix-like operating systems based on the Linux kernel, an operating system kernel first released on September 17, 1991, by Linus Torvalds. Linux is typically packaged as a Linux distribution, w ...
-based system
Millennium Exchange, which had a lower, sub-millisecond
latency.
It acquired this system by acquiring the company that created it, MillenniumIT, in 2009, for £18 million. In its annual report, the LSE said that it expected the switch to Millennium Exchange to save $16 million per year starting from the 2012
financial year
A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many ...
.
By 2011, TradElect had been completely replaced with Millennium Exchange at the London Stock Exchange.
The Oslo Stock Exchange
Millennium Exchange / Delta / Trading / Oslo Børs / Home - Oslo Børs
/ref> and the Johannesburg Stock Exchange also switched to Millennium Exchange.
References
{{reflist, 2
Custom software projects
Former electronic trading platforms
2007 software