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Jul. 6, 2010

The London Stock Exchange (LSE) has decided to delay its 2-year plan to move to its new Linux-based Millenium Stock Exchange trading platform by two more months, in order to give clients and IT suppliers more time for development and testing of the complex application.

LSE's new Turquoise Dark Pool trading platform is now scheduled to go live on October 4, 2010, instead of an original planned launch in August.

Furthermore, the LSE U.K. cash equity market will move off the troublesome Microsoft .Net-based TradElect platform to the new Linux-based Millennium Exchange on November 1, 2010, instead of the September original plans.

A London Stock Exchange press release said “These new dates have been scheduled in response to multiple client and vendor feedback on their specific requirements for development and testing.”

The LSE took on board the new system when it acquired Sri Lankan technology firm Millennium IT eight months ago for £18 million.

As the LSE said annual operating profits had fallen 18 percent to £280.3 million, which it attributed to a challenging economy and increased competition, it still booked £25.3 million depreciation costs on MS' TradElect.

LSE chief executive Xavier Rolet said further savings from the trading platform would be forthcoming, as time-to-market for new products is slashed, functionality extended, and development and ownership costs are further reduced.

Seven weeks ago, the London Stock Exchange said its new Linux-based trading system will save it at least £10 million annually, as well as driving new business to the Exchange.

Millennium Exchange, a Linux and Sun Solaris Unix-based platform, which uses Oracle databases, is being rolled out across all of the LSE’s electronic trading systems, replacing the slower TradElect platform, which is Microsoft .Net based.

Over time, the MS TradElect platform had suffered a series of high-profile and very costly outages and service disruptions and will be replaced by Millennium Exchange in stages from September 2010.

As well as providing the Trading Group with a new, high performance, scalable trading platform for the LSE's cash equities markets, Millennium IT also brings in-house software development capabilities with dedicated R&D resources.

The LSE was driving to increase its scope of activities, with Millennium IT integral to this. As well as providing cost effective trading platforms, Millennium IT will also be used to deliver market surveillance, ticker plant, desktop services, smart order routing and post trade technology.

The group’s acquisition in 2009 of a majority stake in Turquoise, an anonymous or dark-pool trading venue, was also highlighted as a crucial step. As the majority shareholder, the LSE will ensure that the pan-European platform is neutral, efficiently run, open to the broadest pool of clients and develops services on an international scale.

Turquoise will also move to the Millennnium Exchange system, and away from the Cinnober Tradexpress platform, which is Java-based. It will migrate in August or September as well, as services across the Integrated and Dark Midpoint order books start trading on the same day.

Testing is currently ongoing and is monitored closely and on the hour.

In May 2008, the New York Stock Exchange selected Red Hat's Linux offerings to power its complex financial trading system that takes care of approximately $141 billion in stock trading volume on any given day.

This represents an important victory for Red Hat and for the Linux community as a whole. In the coming six to eight weeks, the NYSE and its family of other exchanges will be migrating from HP UX, IBM AIX and SUN Solaris to Red Hat Enterprise Linux.

The NYSE's Euronext operates multiple exchanges including, the New York Stock Exchange, Euronext, Liffe, AlterNext and The NYSE Arca Options Trading Exchange.

Steve Rubinow, NYSE Euronext's CIO said "key components of NYSE Euronext's high-speed trading environments rely on Red Hat Enterprise Linux and are managed by The Red Hat Network. The rapid pace of electronic trading has picked up lately and across the enterprise, the 6.5 hours that comprise the main part of our trading day includes the processing of billions of electronic transactions."

The new trading platform includes at least 600 servers from Hewlett-Packard. Specifically, the list includes 200 HP ProLiant DL-585 quad-core servers and 400 ProLiant BL 685c blades with AMD dual-core Opteron processors, according to Red Hat.

The company said NYSE Euronext did an evaluation of two leading Linux vendors and determined that Red Hat was the better fit. At the time of Red Hat's move of its own stock trading from the Nasdaq to the NYSE, Dion Cornett, vice president of investor relations at Red Hat, did indicate that the change could potentially also yield a technological win for Red Hat.

The hope was that as part of the NYSE's modernization effort, Red Hat Enterprise Linux would play a key role.

What isn't clear at this time is whether Red Hat's Real Time Linux efforts played a role in the NYSE Euronext win. In 2007, Tim Burke, Red Hat's director of emerging technologies took the stage at the Linux on Wall Street event proclaiming the virtues of Red Hat's Real Time benefits for the financial marketplace.

Red Hat added that part of the attraction had been its Security-Enhanced Linux (SE-Linux) functionality. SE-Linux had been developed in partnership with the National Security Agency and applies strict access control policies to Linux.

Red Hat CEO Jim Whitehurst has since set a new goal for his company, aiming to be the first major open source vendor to hit $1 billion in revenue.

In any event, Red Hat is coming off one of the most successful financial years in its history, reporting revenues of $523 million for its 2008 fiscal year.

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Source: The London Stock Exchange.

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