The London Stock Exchange has completed its acquisition of MillenniumIT, in a deal which will provide it with a new trading platform to replace its Microsoft-based TradElect technology.

The £18.4 million deal will provide the London stock market with both a new, high-performance exchange and enhanced in-house development capability.

Xavier Rolet, chief executive of the LSE said. “MillenniumIT will transform our in-house IT development capabilities by giving us proprietary ownership of our technology, allowing us to be more responsive to our clients' needs, delivering enhancements and innovations more quickly, and at lower cost.

"This deal, made on the basis of MillenniumIT's track record, business model and the growth potential it offers the Group.”

The LSE’s existing TradElect platform suffered serious reliability issues last year, when network software problems took it offline for a potentially devastating seven hours. At the time, angry traders stormed out of the exchange in protest.

The system is also alleged to be slower than those at rival exchanges.

The £40 million TradElect system was upgraded by Accenture a year ago. It runs on HP ProLiant Servers and Microsoft .Net and SQL Server 2000 systems, within a Cisco network architecture.

MillenniumIT claims on its website that it has developed the “world’s fastest” trading platform, running on Intel Xeon 5500 processors, and potentially delivering transaction times of 0.13 milliseconds.

The company has said it will be possible to process one million orders per second “using volume produced Intel two socket Nehalem servers”, within a commercially affordable environment.

The LSE’s current trading speed on TradElect is only 2.7 milliseconds, compared to 0.4 milliseconds at specialist electronic rival Chi-X, according to the Wall Street Journal.

The London Stock Exchange has entered into exclusive talks to buy Turquoise, the year old pan-European share trading platform that was developed using Agile methodology.