LSEG to replatform Matching and FXall

London Stock Exchange Group is migrating Refinitiv’s foreign exchange platforms to the technology that powers its stock exchange, bringing their currency trading capabilities into line with the speed and capacity available in modern equity markets.

The replatforming of the Matching and FXall venues onto LSEG’s Millennium technology is expected to be completed over the next two years. The company says the migration will boost order processing and quoting speeds and enable the support of a greater range of order types.

The move comes soon after LSEG completed its $27 billion acquisition of Refinitiv in January. The exchange group is investing £1 billion ($1.41 billion) this year alone as it integrates Refinitiv into the LSEG business.

“It’s very clear that LSEG is recommitting to the foreign exchange market as part of this acquisition. We’ve significantly increased our investment in foreign exchange. When I talk to customers about it, they are excited. They understand the greater opportunities that are available to our FX business as part of an exchange company, and they are looking forward to the future,” says Neill Penney, group head of FX at LSEG.

Penney says the replatforming of Matching and FXall will have multiple benefits. The extra speed, for instance, will reduce the time needed to process or cancel a submitted order.

It also will allow Refinitiv Matching—one of the two large interdealer central limit order books for FX spot—to incorporate new order types to enable more sophisticated trading strategies. Currently there are just two types available: immediate or cancel, where a trade is cancelled if it isn’t matched straight away; and a traditional limit order that stays in the book until matched. Penney would not say what new order types the company has planned, however.

It’s very clear that LSEG is recommitting to the foreign exchange market

Neill Penney, London Stock Exchange Group

“What our customers have said for a long, long time in certain areas, such as Matching, is, ‘We like you and we trust you, but we need more evolution in the product, and we need to see more investment.’ And they’re exactly right,” he says.

New functionalities will also be coming to spot algo users on FXall. The platform will give users executing large orders the option to switch from algo execution to request-for-quote if market conditions change. Some algorithms already offer that capability, but this will provide a uniform workflow across all algo products.

The replatforming will also allow the venues to offer more advanced trade reporting analytics. Currently these are delivered to users in a large PDF but they will soon move to a more interactive, Tableau-based analytics dashboard. Penney says the statistics produced will be venue-specific and oriented towards the needs of users.

“Some of the bigger things that we’ve wanted to do for a long time are now not only possible as part of LSEG, but we’ve committed to doing them and are already working on them,” he says.

The changes follow those at CME Group, owner of rival platform EBS, which is moving the primary spot venue onto its Globex platform. CME completed its $5 billion acquisition of EBS’s previous owner, Nex Group, in 2018.