Cruickshank sets out ambitions for independent stock exchange

Ambitious plans to develop techMARK, London's high technology index, and AIM, the smaller companies market, into the pan-European market of choice for growth companies, were outlined by Don Cruickshank, chairman of the London Stock Exchange, at the weekend.

Ambitious plans to develop techMARK, London's high technology index, and AIM, the smaller companies market, into the pan-European market of choice for growth companies, were outlined by Don Cruickshank, chairman of the London Stock Exchange, at the weekend.

In a speech to the annual conference of the Association of Private Client Investment Managers and Stockbrokers (Apcims) in Brussels on Saturday, Mr Cruickshank repeatedly apologised for the LSE's past errors but said brokers could expect better in future.

With OM Gruppen's £800m hostile bid still hanging over his shoulder, Mr Cruickshank offered a blueprint for establishing a new consultation structure within the Exchange and said he was determined to rid London of competitive disadvantages, such as onerous stamp duty.

The automated Sets trading system would be made easier to use, he said. But he dismissed suggestions that existing technology would be replaced. "Don't draw the wrong conclusion from our choice of [the German technology] Xetra in the merger process. Don't be drawn by the siren 'gee whiz' noises from OM - and others. We have a modern hardware architecture, shared with telecoms, IT and internet companies," he said.

Mr Cruickshank admitted the past few weeks had "not been easy" after the iX merger was thrown into disarray in August.

He expressly appealed to brokers to reject the Swedish group's hostile bid, urging: "We must see off the bid from OM. It is a poor deal for shareholders and customers alike". He added: "We don't have to do deals. We may at some future time wish to do so. But we don't have to. Our strategy is to develop an even stronger business... [to] strengthen our hand in any future industry rationalisation and in seeking the right partners."

Mr Cruickshank conceded that during the iX merger process the Exchange had not listened carefully enough to what its customers were saying. To remedy that, he proposed a new consultation structure anchored by an Exchange Markets Group. He also admitted Sets did not at present meet the needs of the retail community. "Although it has helped drive cost out of the industry and reduced spreads, we know - because you tell us - that you don't like it and you don't use it," he said.

Executive committee member Chris Broad will take charge of improving the usability of Sets, segmenting its focus in order to meet the needs of differing markets, he said.

He pointed out that the plan to introduce a UK central counter party in February next year will make Sets a more effective trading mechanism.

Looking ahead, he talked of plans to reposition techMARK and AIM internationally. The latter last year outperformed all other key indices.

"We have already seen significant success with techMARK gaining listings from Israel, Canada and other overseas countries," said Mr Cruickshank. Our aim is to grow this significantly over the next year to create a European Growth Market based on techMARK."