Stock Exchange attacked by rival over `mischief'

Document suggests problems with Tradepoint

JTradepoint, which next month begins operations as a rival share dealing exchange, reacted angrily yesterday to what it sees as tactics to undermine it by the London Stock Exchange.

A consultation document by the Stock Exchange to be issued this week is believed to suggest that dealing on Tradepoint's electronic exchange could involve greater costs for market makers, the big broking firms that commit their own capital to buying and selling large blocks of shares.

The document also raises questions about whether certain traditional privileges for market makers on the LSE will also apply to Tradepoint. The LSE document is believed to highlight worries about the co-existence of competing exchanges dealing in the same shares.

"We just find it a little sad that the Stock Exchange feels they have to go to these lengths to put us down," said Stephen Wilson, an executive director at Tradepoint. "This sort of defensive action is not good for the industry. All we are doing is providing more choice, building the overall market in London."

With just five weeks to the launch of Tradepoint, which introduces for the first time an automated, order-driven dealing system, the Stock Exchange is raising the tone of its warnings that too sharp a shift in regulatory support towards this first challenger to its virtual monopoly could damage London's position as the pre-eminent financial centre in Europe.

The Securities and Investment Board called in late June in its equity market review for changes to the Stock Exchange's rules, which it said get in the way of a competing dealing system developing.

The SIB was following a recommendation from the Office of Fair Trading in March. In particular, the OFT requested changes to the Stock Exchange's rule 4.18, which obliges market makers not to display better prices on rival systems. The OFT report said this rule "restricts and distorts competition to a significant extent".

The consultation document is to be presented today by Michael Lawrence, the Stock Exchange's chief executive, to the rule committee. It is also expected to raise questions about whether market makers will be exempt from stamp duty on the competing exchange, as they are on the LSE.

"Such suggestions are mischievous," Mr Wilson said. "We went through detailed negotiations with the Treasury and the Inland Revenue about this, and market makers will indeed be exempt from stamp duty on Tradepoint."

He dismissed as a red herring Stock Exchange concerns about problems of two exchanges dealing in the same share. "It was after all the LSE itself which set the precedent here, by launching SEAQ International in the mid Eighties to be able to deal in shares listed on Continental exchanges. It is hard to understand what the LSE is getting at; a lot does not make sense."

Tradepoint expects to begin trading next month in 400 of the biggest London shares, having signed up about 50 institutions. A number of these are brokers and market makers who make up the core membership of the London Stock Exchange. Several of Tradepoint's big shareholders are major institutions, including TSB, Framlington and Robeco. The aim of the business is to capture about 2 per cent of the London dealing market by early next year.

While casting doubt on Tradepoint's aspirations, the Stock Exchange has also been speeding up its own plans to introduce an order-driven trading capability. This is now expected to be operational by late next year.

News
Destructive discourse: Jewish boys look at anti-Semitic graffiti sprayed on to the walls of the synagogue in March 2006, near Tel Aviv
news

As anti-Semitic attacks rise, Grant Feller re-evaluates his identity

Life and Style
food and drink

Savoury patisserie is a thing now

News
news

Meet the primary school where every day is National Poetry Day

News
people Biographer says cinema’s enduring sex symbol led a secret troubled life
PROMOTED VIDEO
News
newsGlobal index has ranked the quality of life for OAPs - but the UK didn't even make it into the top 10
News
people

Kirstie Allsopp has waded into the female fertility debate again

News
In 2006, Pluto was reclassified as a 'dwarf planet'
scienceBut will it be reinstated?
News
The moon observed in visible light, topography and the GRAIL gravity gradients
science

...and it wasn't caused by an asteroid crash, as first thought

News
people
News
Researchers say a diet of fatty foods could impede smell abilities
scienceMeasuring the sense may predict a person's lifespan
Sport
footballArsenal 4 Galatasaray 1: Wenger celebrates 18th anniversary in style
News
peopleStella McCartney apologises over controversial Instagram picture
News
Gillian Anderson was paid less than her male co-star David Duchovny for three years while she was in the The X-Files until she protested and was given the same salary
people

Gillian Anderson lays into gender disparity in Hollywood

Life and Style
Laid bare: the Good2Go app ensures people have a chance to make their intentions clear about having sex
techCould Good2Go end disputes about sexual consent - without being a passion-killer?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
Life and Style
fashionThe Secret Angels all take home huge sums - but who earns the most?
Sport
football

Striker ignored Brendan Rodger's request to applaud audience

News
i100
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Italian couples fake UK divorce scam on an ‘industrial scale’

Welcome to Maidenhead, the divorce capital of... Italy

A look at the the legal tourists who exploited our liberal dissolution rules
Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

The vintage series has often been criticised for racial stereotyping
An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

An app for the amorous

Could Good2Go end disputes about sexual consent - without being a passion-killer?
Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

Llansanffraid is now Llansantffraid

Welsh town changes its name, but can you spot the difference?
Charlotte Riley: At the peak of her powers

Charlotte Riley: At the peak of her powers

After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
She's having a laugh: Britain's female comedians have never had it so good

She's having a laugh

Britain's female comedians have never had it so good, says stand-up Natalie Haynes
Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

Let there be light

Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
Great British Bake Off, semi-final, review: Richard remains the baker to beat

Tensions rise in Bake Off's pastry week

Richard remains the baker to beat as Chetna begins to flake
Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

A look to the future

It's time travel fashion at Louis Vuitton in Paris
The 10 best bedspreads

The 10 best bedspreads

Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
Arsenal vs Galatasaray: Five things we learnt from the Emirates

Arsenal vs Galatasaray

Five things we learnt from the Gunners' Champions League victory at the Emirates
Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?