MillenniumIT: delivering speed, stability and success

  • Millennium IT provides infrastructure technology to over 30 capital markets around the world.

MillenniumIT is one of the world’s leading developers of high performance trading systems. Acquired by London Stock Exchange Group (LSEG) in 2009, the business has grown exponentially and now supplies financial institutions around the world. William Hall reports.

LSEG chief executive Xavier Rolet was appointed in May 2009 and the acquisition of MillenniumIT was one of his first moves. Now considered a great success, it was not without risk at the time. Founded in 1996 by Tony Weeresinghe, an entrepreneurial Sri Lankan software developer, MillenniumIT’s 450 staff and intellectual property were based in a country where a 27-year civil war had ended just months before.

However, LSEG’s Tradelect platform was under threat as more nimble,speedier trading systems, were proving more attractive to market participants and captured increasing market share. London Stock Exchange needed a faster and more reliable trading platform, whilst MillenniumIT needed an internationally respected partner to help develop its global exchange technology business with third parties.

It was against this background that the acquisition of MillenniumIT took place. It has two core businesses –systems integration, and proprietary capital markets software products.

TradElect, London Stock Exchange’s old electronic trading system, was quickly replaced by MillenniumIT’s flagship product, Millennium Exchange. At least 10 times speedier than TradElect, Millennium Exchange also produced immediate cost-savings of at least £10 million a year.

Turquoise, LSEG’s pan-European Multilateral Trading Facility (MTF) now has an average latency (the time delay between initial input and output of an order) of 99 microseconds (1 microsecond = 1millionth of a second), and latency of the UK cash equities platform is 106 microseconds.

The benefits of this surge in speed are widespread, both for LSEG customers and MillenniumIT, where staff numbers have increased to almost 700 and revenues are growing at more than 20 per cent a year. The Group has also recently opened a third purpose-built building on its 19.5-acre campus, named after Alan Turing the inventor of British computing.

New markets, new products

Not only has MillenniumIT revolutionised LSEG’s own trading performance, but it now provides market infrastructure technology to over 30 capital market clients, ranging from traditional stock exchanges to inter-dealer brokers and central securities depositories.

The business has developed an increasing number of capital markets products and services too, including Millennium SOR (ultra-low latency, flexible and intelligent order routing), Millennium Gateway (high performance connectivity platform), Millennium MarketData (ultra-fast and efficient data for financial markets) Millennium Surveillance (real-time, multi-market monitoring and compliance), Millennium PostTrade (real-time, cross-asset clearing, settlement, risk and CSD solutions) and Millennium LiveOps (high availability IT operations for capital market firms). These products cater for much more than the traditional cash equity markets, covering the trading requirements of multiple asset classes including derivatives, debt, commodities, foreign exchange, structured products and exchange-traded funds.

In 2012, MillenniumIT technology went live at exchanges on three continents. In Europe, Borsa Italiana’s cash equity and fixed income markets migrated to Millennium Exchange (and switched from London to Milan). In Africa, the Johannesburg Stock Exchange migrated to Millennium Exchange and Surveillance, and in Asia the Mongolian Stock Exchange went live with three MillenniumIT platforms for trading, surveillance and central securities depositary.

Since then, MillenniumIT has serviced a growing roll-call of new clients, including Oslo Børs, which migrated its trading onto Millennium Exchange; Bursa Malaysia, which is using MillenniumIT’s surveillance system and the London Metal Exchange, which has adopted a MillenniumIT compliance monitoring system.

The Austrian central clearing house has chosen MillenniumIT’s PostTrade clearing and settlement platform for clearing cash market trades, whilst Hong Kong Exchanges and Clearing (HKEx) has recently installed MillenniumIT’s smart order router technology for its trading community, highlighting the system’s “capability to handle a high level of order throughput with microsecond levels of latency and high availability.”

MillenniumIT’s early growth was built on supplying systems to emerging markets in Asia and Africa. However, it has recently begun to make inroads into several of the fastest growing markets in Latin America. It has been selected as the business development and technology partner by the Argentinian Central Securities Depository, and Bolsa de Valores de Lima, Peru’s stock exchange.

Singapore Exchange (SGX) has also recently signed up as the first major client of the full Millennium PostTrade platform for complete post-trade processing in real-time, which signals MillenniumIT’s commitment to the fast evolving clearing and settlement market.

Growth ambitions

The rapid growth in MillenniumIT’s business with third party customers has demonstrated that its low latency platforms appeals to a growing number of capital market clients around the world. Even more important, its technology has quickly become a cornerstone of LSEG’s efforts to diversify and grow its business.

The Group has underscored its ambitions for MillenniumIT with the appointment of Mack Gill as chief executive. A senior executive with SunGard Data Systems, one of the world’s leading financial software technology firms, Gill was hired in May 2013 to take over from founder Tony Weeresinghe.

MillenniumIT is a smaller business than SunGard Global Technology, where Gill was responsible for over 4,000 staff worldwide, but it was MillenniumIT’s cutting edge approach to software engineering and design that attracted him to his new role.

“Clients are seeking solutions based on connectivity and platforms that can provide very rapid straight through processing. MillenniumIT is not only one of the fastest platform in the world but it has one common set of tools and technologies which underline all of its applications and can be accommodated on the same platform. That is a unique differentiator for us,” says Gill.

MillenniumIT’s systems are also praised for their reliability.

“Speed is extremely important. But what is becoming as important is stability and reliability. The ability to have a combination of very fast but also very stable systems is something we are truly proud of,” says Gill.

Antoine Shagoury, LSEG’s chief operating officer, describes MillenniumIT’s trading and settlement systems as “providing the lead-in, glue and delivery arm for a range of other LSEG services.” The recent acquisition of the LCH Clearnet, for example, offers plenty of potential for MillenniumIT to adapt its ultra-low latency technology to new areas, such as providing systems that manage collateral in real time trading.

It is clear that MillenniumIT’s low cost, flexible, resilient technology is playing a key role in supporting the LSEG ambition to transform itself into one of the world’s leading global market infrastructure businesses. As Rolet explains: “MillenniumIT more than fulfilled our expectations.”