DESPITE continued grumbling about the London Stock Exchange's electronic trading system, chief executive Gavin Casey remains adamant that order-driven trading is integral to the exchange's on-going success in ''euroland.''
Speaking before last night's annual Stock Exchange dinner in Edinburgh, Casey highlighted the fact that every other major bourse in Europe had some form of order-driven trading before the UK finally introduced SETS in October 1997.
Recent reports have indicated that London's electronic system is losing market share and drawing harsh criticism from some leading fund managers. But Casey said that without SETS, the launch of the euro on January 4 would make it ''very difficult'' for the UK to deal with international equities.
Responses to a follow-up review of SETS should be published within the next couple of weeks, Casey said. A report from the Stock Exchange about any final adjustments should follow in about one month's time.
One of the main problems created by the new system is illiquidity at the opening and close of trading, which means investors executing transactions at these times run the risk of receiving unfavourable prices for their shares.
Illiquidity also creates the opportunity for rogue traders to unduly influence share prices with relatively small trades.
Casey said: ''We are likely to change a few things at opening and closing, to help with those issues.''
About half of all international equity trading in London is done in currencies that will be part of the euro bloc. The exchange's platform is already capable of trading in 36 currencies, so the shift to trading in euro-denominated securities and the ability to quote euro prices for UK stocks can be introduced when there is sufficient demand.
With such preparations in place and a review of euro-trading underway, Casey said he had no qualms about attracting listings from overseas companies in the future.
''London and Edinburgh stand out head and shoulders when it comes to investing in international equities,'' he said.
n This year's Greig Middleton Award for Best Scottish Company on the Official List has been given to Edinburgh-based Morrison Construction, while Midlothian-based Dobbies Garden Centres has been selected as Scotland's best AIM-listed company.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article