Written by: Taranjit Singh
Date: 27-11-2023
This string of outages has raised concerns among investors and traders, who rely on the LSEG's smooth operation to execute their trades. John Moore, head of trading at Berkeley Capital Wealth Management, expressed his apprehension, stating, "It doesn't bode well for the LSE as it isn't the first time. Investors and traders may lose confidence when they cannot transact, as well as attract attention from the regulator as the issues persist. In this day and age, we expect 100% uptime as per major stock indexes globally."
LSEG has acknowledged the issue and is currently investigating the cause of the latest outage. In October, the exchange attributed the trading halt to "a matching engine logic issue." These repeated disruptions are particularly concerning as LSEG seeks to transform itself into a leading data services provider.
In 2022, Microsoft Corporation acquired a 4% stake in LSEG, forging a partnership that would see the exchange operator invest billions of dollars in Microsoft's cloud services over the next decade. This deal was seen as a crucial step in LSEG's digital transformation journey.
The acquisition of Refinitiv in 2021 for $27 billion was another significant move aimed at propelling LSEG into the data services arena. As part of its transformation strategy, LSEG plans to establish five new divisions starting next year: data and analytics, FTSE Russell, risk intelligence, capital markets, and post-trade.
However, the recent outages have tarnished LSEG's reputation and raised questions about its ability to handle the demands of its new business model. As LSEG strives to become a data services powerhouse, ensuring the stability and reliability of its trading platform remains paramount to regaining the trust of investors and traders.