The London Stock Exchange cleared a final hurdle ahead of a crucial planned system upgrade, sources familiar with the situation said on Monday, three months after it delayed the switch amid suspicions of sabotage. The UK operator completed its last system test session with clients over the weekend before moving its main UK equity order book Sets 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. 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 OMX, which said on February 5 it had found "suspicious files" on its US computers.
The LSE had already moved its European share trading platform Turquoise over to the new technology, developed by Millennium, a Sri Lankan firm it bought in 2009. But the bourse halted the migration of Sets when Turquoise crashed for the second time in a month in November. The LSE said at the time the failure had taken place in "suspicious circumstances", notified the police and launched a full investigation, sparking reports of sabotage. But the exchange said later the crash was the result of human error and that the incident was closed.
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