Investec Securities and Shore Capital have signed up as the first retail service providers (RSPs) to use the London Stock Exchange's new Gateway trading system to provide quotation and execution services to private client brokers.
The Gateway works by linking RSPs and private client brokers through a single exchange network connection rather than multiple proprietary connections.
Other RSPs who intend to offer services to brokers through the Gateway include: Altium Capital, Robert Baird, Beeson Gregory, HSBC Investment Bank, Knight Securities International, R A McLean & Co Ltd, Van der Moolen Bonds, JP Morgan Securities and Teather & Greenwood.
RSPs will use the Gateway to offer a range of trading services, between them covering almost 1500 stocks, both blue chips and small caps. JP Morgan and Van der Moolen will use the exchange service to offer trading in covered warrants and bonds, respectively, from the end of September.
Brokers will access the Gateway through their own in-house software or through one of the front-end applications provided by vendors. Consort, Misys Securities Trading Systems and royalblue have all completed the necessary testing for their front-end application. Others such as Orc Software and Pershing are in the process of their development.
Perry Crosthwaite, chairman of Investec Investment Banking and Securities, says: "We foresee significant benefits for retail brokers and their clients in terms of connectivity and best execution. The RSP Gateway will broaden our distribution base allowing us to connect efficiently to retail brokers."
Simon Mathias, director of dealing at Shore Capital, adds: "This will provide the electronic platform for us to offer quotes to a wide range of stockbrokers."