2 May 2007

The London Stock exchange is the world's premier international cash equity exchange and a leading provider of services that facilitate the raising of capital and the trading of shares for companies across the globe.

The company previously disseminated data through the London market Information Link (LMIL). Although the architecture is extremely reliable, new developments and capacity increases are complex, time consuming and costly to implement. The London Stock Exchange needed more flexibility to facilitate new product and service development, reduce latency and improve scalability. This Infolect Project was part of the company's four-year transition to next-generation trading, called the London Stock Exchange Technology Roadmap (TRM).

"A new platform was required that would be more scalable, with better performance and be cheaper to manage, with higher capacity and equal reliability levels," said David Lester, chief information officer at the London Stock Exchange. "The existing environment had major constraints that meant significant expenditure would be needed to give the level of service our customers require."

Delivering a step change in scalability and flexibility was not the only reason the Exchange needed support for its TRM from Microsoft and Accenture. Infolect is designed to handle more than 15 million real-time messages every day and is 15 times faster than the technology it has replaced.

"The investment was justified on the basis of increased performance, which makes our markets more attractive to trade on for our customers," said Lester. "By using commodity server hardware and a Microsoft.NET infrastructure, it will be quicker, cheaper and more cost effective to increase Infolect's capacity."

The Microsoft.NET framework was chosen for a number of reasons, included developer efficiency, performance and scalability.

A prototype, which focussed mainly on the architecture and the communication layer, was first developed with Microsoft and Accenture, and guided the design and development of Infolect. Developers used many of the prototype concepts and libraries and subsequently incorporated them into Infolect.

The Infolect architecture, with an iBus messaging layer at its core, supports an 'Active-Active' configuration, with all core components replicated across multiple data centres to achieve world-class levels of availability. Infolect is also designed to be both vertically and horizontally scalable through the use of a four-tier architecture implemented on commodity hardware.

"Infolect is designed to receive real-time information feeds from multiple sources, including the London Stock exchange trading system," said Robin Paine, chief technical officer at the Exchange. "These messages are translated into a common message format and then published to a transformation layer which enriches the messages as necessary."

Using the .NET framework in Windows Server 2003 and the Microsoft SQL Server 2000 database, the London Stock exchange has found the system to be 'very reliable' which has been proven in more than four years of production. Tight integration of the Microsoft development environment and database technologies provides increased developer productivity and thus increases application agility. London Stock Exchange customers now gain access to real-time information faster than on any other exchange in the world. Infolect is performing better than the previous LMIL system in several key areas, which is helping to ensure that customers can execute trades reliably and quickly, particularly when engaging in algorithmic trading.

Indeed, many market commentators consider that algorithmically generated trading operations now hold the key to the Exchange's commercial edge and future success. End-to-end latency has been significantly reduced and performance has increased with Infolect. It is approximately 15 times faster than LMIL, with an end-to-end latency as low as two milliseconds.

"No other exchange is undertaking such an ambitious technology refresh programme based on next-generation Microsoft Technology," said Lester. "We have always provided a first-class service, but now we can claim to be the fastest in the world as well."

Reliability is fundamental to the Exchange's value proposition for the market and continues to give its senior managers peace of mind about system uptime. There are approximately 300 customers who connect directly to the live Infolect system to receive real-time market data directly from the London Stock exchange. The data disseminated from Infolect is then displayed on more than 107,000 terminals in more than 100 countries.

In the past six years there have been no production outages at the London Stock Exchange, and the new systems running on Microsoft technologies are critical to maintaining this 100 per cent reliability record.

The Exchange is also gaining a considerable cost advantage by using the .NET framework. "The TRM gives us a significant cost advantage over our competitors for global liquidity," said Paine. "It will help us to continue investing in new products and services, while minimising technology cost of operations."