LSE Names Kevin Milne to Run Post-Trade Services (Correct)
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By Nandini Sukumar
(Corrects Milne’s comment on trading costs in seventh paragraph.)
Jan. 18 (Bloomberg) -- London Stock Exchange Group Plc, which has surrendered 40 percent of trading in FTSE 100 stocks, named Kevin Milne to lead its post-trade services business as it seeks to boost alternative streams of revenue.
Milne, 47, is the former chief executive officer of Euroclear SA’s Xtrakter business, the exchange said in a statement today. He will lead a unit that includes Cassa di Compensazione & Garanzia and Monte Titoli SpA, which LSE acquired with its 2007 purchase of Borsa Italiana SpA. Massimo Capuano, who previously oversaw post-trade, will continue to be deputy CEO of LSE, head of the Italian exchange and head of legal and regulatory strategy, LSE said.
“He’s a well connected, well respected, industry veteran,” said Herbie Skeete, London-based managing director of Mondo Visione Ltd., which advises exchanges, and who’s known Milne for 15 years. “He knows all the moving parts.”
LSE Chief Executive Officer Xavier Rolet took over from Clara Furse in May last year and has cut costs and staff, is changing trading tariffs, introducing hidden orders and making acquisitions including rival trading platform Turquoise. Rolet has said he wants to expand LSE’s post-trade services including clearing. LSE lags rival Deutsche Boerse AG in post-trade.
Post-Trade Competition
Traditional exchanges including LSE, Frankfurt-based Deutsche Boerse AG and NYSE Euronext have been losing market share to so-called multilateral trading facilities including Turquoise, Bats Europe and Chi-X Europe Ltd., all of which are backed by banks and brokers, the biggest exchange customers. The MTFs have driven down trading fees and also encouraged competition in post-trade.
Milne, who worked at the London Stock Exchange between 1986 and 1991, will report directly to Rolet, the exchange said today, adding the unit is one of its “three main business divisions and Kevin will be responsible for driving the growth and diversification of its services.”
“When I was here the first time round, one of the questions people kept asking is why it cost more to clear in Europe than in the U.S.,” Milne said in an interview today. “Now, because the cost of trading has reduced so quickly it probably costs less to trade a stock than to clear and settle it. Resolving that is one of the priorities. And we want to provide higher value services at a competitive price.”
LSE on Nov. 25 reported first-half revenues from post-trade activities rose to 59.3 million pounds ($96 million) from 51.1 million pounds in the comparable period a year ago as revenue from trading, where the LSE makes most of its money, fell 28 percent to 95.2 million pounds.
LSE shares added 9.5 pence, or 1.4 percent, to 694.5 pence at the close of trading in London.
To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net.
Last Updated: January 18, 2010 15:04 EST
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