London Stock Exchange down again after connectivity problem

New issue on costly outgoing platform

The London Stock Exchange has taken down electronic trading, after its fourth major technological incident in just over a year.

The problem today is the result of intermittent "connectivity issues" with clients trying to use the trading platform. Over the last year, traders have been frustrated by a string of technical problems they have faced.

A spokesperson steadfastly refused to give any further technical details of what has happened or how it is being fixed, but insisted the issue was being investigated.

Issues emerged at 9.30 am today, and the LSE suspended trading at 10.33 am, sending all stocks to auction instead. This means trades are agreed but do not go through until later in the day.

The exchange's troubled TradElect platform was upgraded in 2008 by Accenture at a cost of £40 million, is based around Microsoft .Net architecture and runs on HP ProLiant servers with Cisco networking technology.

TradElect is due to be replaced at the end of 2010 with an open source product from new LSE acquisition MillenniumIT. The outgoing platform's messaging speed is reportedly five times slower than rival Chi-X.

Just yesterday, the LSE announced it had booked £20.4 million costs on the almost redundant platform, over only a six month period. The money related to efforts to speed up the technology and pull messaging times down to below 2 milliseconds - and also to the decision to accelerate the platform's depreciation on the LSE accounts.

TradElect last experienced time offline two weeks ago, when an undisclosed server software glitch led to the LSE halting trading in 243 instruments for several hours.

A month earlier, the LSE suspended trading in a number of FTSE 100 stocks. Issues with the way some customers were inputting orders for certain stocks led to invalid data in the exchange's systems. The LSE insisted its own technology was not at fault.

In September 2008, a large technical problem due to an undisclosed "combination of software activities", caused trading to be stopped for seven hours. At the time, angry traders stormed out of the building in protest.

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