Reuters warns of threat to share-dealing revolution

Reuters, the information conglomerate, has warned the Stock Exchange that the continued inability to resolve arguments over new share trading systems could jeopardise the 1996 date for the exchange's order-driven dealing revolution.

Reuters, which would supply a large portion of the links between the dealers and the Exchange, said the complicated technology needed a clear decision or there could be no commitment to the August timetable put forward by the Exchange. "We won't commit to a date until we can see what the market really wants," said John Parcell, managing director of Reuters UK.

The pressure was stepped up as Reuters introduces today a capacity enabling traders to deal in smaller companies shares directly on the London Stock Exchange through an order-matching system.

This enables the Exchange to fight back against its fledgling rival, Tradepoint, which in September opened the first alternative exchange, using an electronic order-driven system. This automatically and anonymously matches buy and sell orders, cutting out the market-making middlemen who have run the Stock Exchange's traditional quote-driven dealing system.

The Stock Exchange has set 27 August 1996 as the date for introducing a state-of-the-art order-driven capability, which could mean two dealing systems competing for the same stocks. But some of the Exchange's most powerful members, the big market-making firms, are resisting this for fear that it will put them out of business.

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