LSE ready to upgrade its IT systems

the London Stock Exchange cleared a final hurdle ahead of a crucial planned system upgrade, sources familiar with the situation said yesterday, three months after it delayed the switch amid suspicions of sabotage.

The operator completed its last system test session with clients over the weekend before moving its main UK equity order book to newer, faster technology on February 14, two sources said.

A further delay would have been a blow for the LSE, which is working hard to regain market share from a host of newcomers, but the test went smoothly with only minor glitches, two large investment bank clients said.

The LSE declined to comment last night.

Large exchange groups such as the LSE are increasingly reliant on technology to make them attractive to electronic traders, including high-frequency trading firms.

But this reliance increases the risk of cyber-attack, as evinced by LSE rival Nasdaq, which said on February 5 it had found “suspicious files” on its US computers.

The successful final test is a boost for the centuries-old UK exchange as it seeks to reinvent itself as a tech-savvy firm and compete more effectively with relative new entrants such as Chi-X Europe and Bats Europe.

“This is a big deal for the LSE, the UK is our largest market,” said the head of client trading at one large European investment bank.