London Stock Exchange’s chief executive Clara Furse has dismissed the rival trading platform, Project Turquoise, as possibly non-viable.

In a confident riposte to the group of seven investment banks seeking to take business from the LSE, she likened the new body to the London exchange’s previous mutual status when it was difficult “to resolve the conflicts of interest that exist when only one part of the market controls the trading platform”.

London remains the most successful of the world’s stock exchanges, raising £54 billion ($105 bn) last year, twice what Nasdaq and the New York Stock Exchange managed between them. The LSE’s profits rose 73 percent in the same period, with both buoyant Russia and China piling into the light-touch trading regime which is situated in a congenial timezone for their operations.

Furse also believes the rival banks’ platform will not be able to compete with the LSE’s 4pence fee from £1000 worth of shares purchased.

Project Turquoise responded, “We are very much on track to be up and running and reduce the total cost of trading for those who buy and sell shares”.

This summer the LSE will unveil its own new platform, TradElect.

The New York Stock Exchange-Euronext deal is all but tied up, and Nasdaq is still rubbing its wounds after losing its battle to buy the London Stock Exchange.

Another disappointed suitor, however, has hit back with a major purchase. Deutsche Borse is to pay £1.4 billion for the International Securities Exchange, an options trading platform, based in New York.

The deal will beef up the German exchange’s Eurex derivative platform — a joint enterprise with Swiss exchange SWX. It also smartly tucks away mony the hedge funds were asking to be returned to them.

And what is the LSE doing amid this flurry of activity? Clara Furse is stoutly concentrating on internal matters, like the EDX, its challenger to Liffe which escaped her clutches a few years ago.

Independence means independence then!

With Robert Greifeld identifying three key areas of interest for Nasdaq in the next year, a renewed bid for the London Stock Exchange seems likely. The areas are :

* Taking market share from NYSE Group.
* Fending off BATS, a new electronic stock market.
* Forging mergers and acquisitions.

It is then anticipated that Nasdaq will make a new attempt to take over the LSE before the end of the third quarter of next year.

The LSE has declined to comment on Nasdaq’s position. In return, it ratcheted up takeover rumours by claiming that it’s looking at its own “strategic alternatives”.

The Times (London) reports :

The New York market has been linked to takeover talks with both the Philadelphia Stock Exchange and the Nordic OMX market in the past week. It is understood that the talks with Philadelphia are advancing well and that Nasdaq insiders expect a takeover to be sealed within six months.

Talks with OMX, which has also tried and failed to take over the London exchange, are at a much earlier stage, but both potential deals are part of a wider strategy to boost Nasdaq’s balance sheet and improve its product offering, so that its next bid for the LSE will be more difficult to reject.

A Nasdaq insider commented, “The long-term objective is still London. This is a game of chess and LSE is the king.”

We await the new LSE moves with great interest.

The Chairman of the London Stock Exchange, Christopher Gibson-Smith, recently gave an interview to The Times (London) considering a number of possible outcomes for the business going forward.

In the wake of the comprehensive defeat of the Nasdaq bid, what threat is posed by the new giant forming across the water in Paris between Euronext and the New York Stock Exchange?

“What’s going to happen”, says Gibson-Smith? “I don’t suppose they know. We watch it really carefully, but it’s not a short-term threat.”

He also dismisses any increased competition arising from Mifid, the new EU directive on financial services, and the prospect of Project Turquoise, a rival trading platform from a consortium of powerful banks. Mifid, he says, offers more opportunities to the LSE than dangers, and more of a threat to continental rivals. “They have tried it before and not achieved it. They might this time. We don’t [believe they will]. We feel confident in being able to deal with it.”

The Chairman points out that the LSE is growing trading volumes by 55 percent a year driven by algorithmic trading, which allows business to be conducted electronically at high speed. “[The system] is transforming capacity to use our transformed market”, he says. “I see a world awash with opportunities.”

However, on global markets, he’s more cautious, “There are some real national barriers in the way of achieving that.” And will the NYSE/Euronext giant come gunning for the LSE? “It’s filling column inches, but …”

Philosophical to the end, Christopher Gibson-smith opines, “There have never been, in my entire business career, fewer than five huge uncertainties that have to be dealt with”.

Whatever happens, it’s obvious the Chairman of the LSE does not intend to be caught napping.