Putting the drama back into LSE share trading
XAVIER Rolet, chief executive of the London Stock Exchange (LSE), is looking to rekindle some of the fun and excitement of share trading that has been lost since the bulk of the City’s traditional open outcry trading floors were closed.
As City PM first revealed on Tuesday, the LSE is axing the sculpture known as “The Source” from its Paternoster Square headquarters. Instead the exchange has promised to “spruce up” its market opening ceremony – perhaps mimicking the New York Stock Exchange’s famous opening bell. Sadly those City veterans who can remember the old clanger at Threadneedle Street are not convinced such plans can inject the necessary drama into share trading. In New York the trading floor still exudes testosterone-fuelled trading activity. In London an eight-storey high sculpture with 729 balls moving sedately up and down some wires may have seemed a good idea at the time but was never the most dynamic of images. As a way to impress visitors arriving at the City’s most important institution it was a flop.
So how can the LSE – which shut its pits in 1986 – promote share trading in the Square Mile as a similarly exciting activity to that in Wall Street when today it is represented in the public eye by a host of coloured numbers flickering on computer screens?
In many ways the LSE missed a massive opportunity when it failed to buy the London International Financial Futures and Options Exchange (Liffe) 10 years ago. Liffe still had a trading floor back then and the LSE could have used this as the perfect stage to demonstrate to the world the fast-paced excitement of trading in Canada.
While Dame Clara Furse did a good job of delivering shareholder value during her tenure at the LSE, she neglected to “take London to the World and bring the World to London”, according to City veteran David Buik at inter-dealer broker BGC partners.
This failure – along with crazily high fees for share trading – opened the door to upstart rivals like Turquoise and Chi-X who have snaffled business from the incumbent.
Rolet clearly has radical ideas about how to shake-up the LSE. One way he could project more dynamism is to shift a crowd of the back office staff from their cubbyholes upstairs to the ground floor, seat them behind glass in front of a giant trading screen and let people actually see what goes on there. Failing that, how about allowing a bank or brokerage to base their own trading desk at the LSE – perhaps rent free – so that the public can see how exciting trading really is. [email protected]