LSE poised to acquire Sri Lankan technology company
The London Stock Exchange (LSE) is expected to announce, possibly as
early as Wednesday, the acquisition of Millennium IT, a Sri Lankan
trading technology company, as the group embarks on a massive upgrade of
its trading platform.
The move marks the biggest step yet taken by Xavier Rolet, Chief
Executive, to dismantle the legacy of his predecessor Clara Furse. The
exchange’s existing TradElect trading system was upgraded two years ago
at a cost of £40m ($66m).
But its capacity - that is, its ability to handle messages, or orders
- significantly lags behind rivals such as Chi-X Europe, at a time when
being able to absorb thousands of messages per second is essential to
attracting business from algorithmic and so-called high-frequency
traders. The purchase of Millennium IT, founded by Sri Lankan
entrepreneur Tony Weeresinghe in 1996, is likely to cost under £50m. The
LSE has £370m in loan facilities at its disposal.
Millennium IT has developed, in laboratory conditions at a facility
in the UK, what it claims is the fastest trading system in the world. It
handles trades in 130 microseconds, compared with 250 microseconds on
Nasdaq OMX, which had claimed to be the fastest based on commercial
The Sri Lankan company won its first contract integrating systems for
the Colombo Stock Exchange.
Since then it has expanded rapidly to the UK - where it includes Icap,
the inter-dealer broker, as a client - and the US, where it has offices
in Boston and New Jersey.
The company has developed a system that can handle up to 1m messages
per second, compared with 20,000 available on TradElect currently. Chi-X
Europe operates a system capable of handling 225,000 messages per