The London Stock Exchange, which has seen almost a half of its shares snapped up by two rival Arab Royal families, has announced that the summer’s volatility in share trading during the credit crunch in financial markets has boosted growth in the booming exchange’s business.

Chief executive Clara Furse said the merger with Borsa Italiana should be completed by October 1st. “The exchange is very close to completing the merger with Borsa Italiana, having secured overwhelming support from both sets of shareholders. We are focused on implementing our merger plans which will lead to accelerated growth for the enlarged group.

“The Exchange continues to make excellent progress and has delivered a very strong trading performance for the year to date. In particular, the Sets electronic order book achieved enormous volume growth over the summer, as increased market volatility during the period added to strong growth already being facilitated by the new TradElect platform, in conjunction with customer and other exchange initiatives.”

In the past five months alone, the number of deals done on the Sets electronic trading system has grown by 75 percent over the same period a year ago, to around 551,000 a day. This smashes the 480,000 target set for the full year ending next March.

With shares in the London Stock Exchange hitting the dizzy heights of £13.92 ($27.56) — Nasdaq’s offer was £12.43 — the exchange is now on the reserve list for the Footsie 100.

If it’s promoted to that elite squadron, its stock would be picked up by all the tracker funds leading to further gains in value. It’s an enviable prospect and would probably ensure the hard-pressed exchange some respite from the constant challenges it has faced in recent years.

As if to emphasise the point, the LSE has just upgraded its technology platform. The new system allows trades to be executed in full in just 10 milliseconds and allows companies a much easier experience for trading in shares and other instruments.

Called TradElect, the new system is one in the eye for bankers’ darling, Project Turquoise, which is yet to be launched.

Here’s how the LSE describes TradElect :

TradElect, the Exchange’s brand new trading system is up and running. TradElect brings unprecedented levels of performance, enhanced functionality and new services to our markets whilst maintaining our exemplary record for reliability.

It allows our customers to trade on one of the fastest, most reliable and technologically advanced equity markets in the world.

Its introduction marks the final and most significant phase of the Exchange’s four-year system upgrade project – known as Technology Roadmap (TRM) - and now delivers a range of key functional and technical enhancements including;

* Increase the speed and efficiency of trading
* Provide the framework for the rapid development of new markets and asset classes
* Enhance the market structure to better support order routing, settlement and clearing
* Extend functionality for order handling, quote management and trade reporting.

These are surely the good times for the LSE and its doughty chief executive, Clara Furse, and chairman, Chris Gibson-Smith.