by Leo King

London Stock Exchange server software breakdown stops trading

Nov 10, 2009
Financial Services IndustryMobile Apps

The London Stock Exchange halted trading in 243 instruments on Monday, after a server software problem affected its TradElect and Infolect platforms.

The problem, with the LSE’s matching engine – which is the core engine that links buyer and seller trading – happened on a crucial day. The LSE was expanding its co-location services, where traders’ systems are placed within metres of the exchange’s datacentre in order to speed trade execution times.

The exchange insisted to CIO sister title Computerworld UK that this upgrade was not the cause of the problem. But it is the latest in a string of technical problems at the exchange that has frustrated traders.

Monday’s problem began at 3.12pm, and trading in one in 12 instruments was halted for the rest of the day. Instruments affected included commodity trades such as heating oil, wheat, sugar, gold and platinum, as well as company shares including BP and Severn Trent. All are said to be trading normally now.

Accenture, the outgoing services provider to the LSE that also fixed the problem, declined to comment on the technology affected. The company created and runs the soon-to-be-scrapped TradElect platform, based on Microsoft .Net architecture.

The LSE also runs Microsoft Windows Server 2003 software on its servers, but it is unknown if that software or Microsoft .Net architecture was at fault. Microsoft had not provided comment at the time of writing.

HP, whose ProLiant servers are the back office hardware for trading at the LSE, said its servers were not at fault.

Europe’s oldest independent bourse declined to comment. In a notice to traders, the LSE said yesterday that it was working “towards a full resolution” of the issues.

It is the latest in a string of technical problems at the LSE. Five weeks ago, a data glitch led to the LSE having to temporarily suspend trading in some FTSE 100 stocks, after invalid data was found in the Exchange’s core TradElelect and Infolect systems. The exchange said at the time that its technology was not at fault.

A year ago, it experienced serious problems with electronic trading, when network software problems took TradElect offline for a potentially devastating seven hours.

The exchange is moving away from its Microsoft .Net architecture to a Linux-based setup, following its £18 million acquisition of Sri Lankan technology supplier Millennium IT in September. It is currently bringing IT in-house and away from existing suppliers.

At the time, Microsoft said it “continues to support some of the most demanding, mission-critical environments in the world and is constantly raising the performance bar with new solutions”.

It said it had completed three different proof-of-concept projects “for a major international stock exchange”, using Windows Server 2008 and Microsoft .NET.