London Stock Exchange creates virtual Turquoise access ahead of Linux big-bang

An “ultra-fast” link between the datacentres of the London Stock Exchange and Turquoise has gone live, gearing the dark pool trading venue for a big-bang Linux migration.

Traders with hosted systems at the LSE are now able to access Turquoise on the free fast link, ahead of Turquoise’s migration to the Millennium Exchange platform, which is Linux and Sun Solaris Unix-based, with Oracle databases. Turquoise currently runs on the Java-based Tradexpress platform from supplier Cinnober.

The addition of the high speed link means that traders now have one virtual co-location for both Turquoise and the more mainstream, non-dark pool TradElect and Infolect platforms.

The migration to Millennium Exchange, due in August or September, will see services across the Integrated and Dark Midpoint order books commence trading on the same day. But ahead of the switchover, the LSE has also invested heavily on outgoing platforms to speed up network messaging.

Median latency times on the existing Turquoise platform have now been cut to sub-800 micro seconds, the exchange said, from “around a millisecond”. Order matching times on Turquoise were reduced in order to help process growing volumes in non-display Midpoint orders, now the second largest such venue in Europe, and to cope with additional market makers joining up.

David Lester, chief executive of Turquoise, said the exchange would “further differentiate itself from competing venues” with the migration to Millennium Exchange, “offering synergies for clients who choose to access both the London Stock Exchange and Turquoise through shared co-location, connectivity and common trading interfaces”.

Elsewhere, traders on the LSE’s mainstream TradElect platform – which will from September move to the Millennium system in more gradual steps – are also seeing latency reduced. In November, the LSE booked £20.4 million costs over a six month period from the drive to speed up the platform and accelerate depreciation on the group's accounts.

But messaging times on TradElect, which is Microsoft .Net-based, remained significantly more lengthy than on Turquoise, and only crept below two milliseconds, reportedly five times slower than specialist electronic rivals such as Chi-X.

Copyright © 2010 IDG Communications, Inc.

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