LSE, LEHMAN PLAN JOINT DARK LIQUIDITY TRADING FACILITY

Posted June 26, 2008

LONDON -- The London Stock Exchange (LSE) and Lehman Brothers are planning a pan-European multi-lateral trading facility (MTF), to be called Baikal, which will execute non-displayed dark liquidity orders using algorithmic trading capability.

“The LSE has an over-arching objective to improve market efficiency for the benefit of investors and issuers, and we will continue to innovate to promote that goal,” says Clara Furse, Chief Executive Officer of the LSE. “Baikal provides an exciting opportunity for the market to transact certain types of business in European equities with the confidence of total pre-trade anonymity, alongside the efficient price formation of the electronic order books of exchanges, where the majority of equities across Europe are traded.”

Baikal will allow buy- and sell-side participants to trade larger orders in an environment that will minimize market impact of their trades. “Baikal represents a substantial evolutionary step in providing market participants with the ability to access and utilize efficiently dark liquidity in European equities, and we anticipate that Baikal will be the premier platform for addressing the growing complexities of the market place,” says Jeremy Isaacs, Chief Executive Officer, Lehman Brothers, Europe, Middle East and Asia-Pacific.

The LSE and Lehman Brothers are promising that Baikal will offer open and equal access to securities across 14 European countries and smart order-routing to liquidity in at least 22 trading venues, along with anti-gaming controls, sophisticated market surveillance tools and real-time post-trade reporting through the LSE’s Infolect feed.