E-commerce - Redefining exchanges

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E-commerce - Redefining exchanges

After the summer craze for investing in all things electronic and e-commerce-related, things have calmed down on the surface in the US. Now the challenge is to make the investments work. The major stock and derivatives exchanges know they have to respond more forcibly to the myriad threats to their franchises. At the same time the start-ups and the investment banks which are equity partners must transform their ideas into reality while trying to avoid the organizational nightmares which have plagued the exchanges. The next few months are more likely to be ones full of frustration for both groups, reports Antony Currie.

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When you first visit Richard Kilsby at his office there is a surprise in store. He is the chief executive of Tradepoint, the London-based for-profit electronic exchange saved from extinction in May by a consortium led by agency broker Instinet and also including investment banks, an asset manager and a US electronic commission network (ECN) called Archipelago which itself has since applied to become an exchange in the US.


What provokes the surprise is preconceived ideas of what an exchange should look like: large buildings in the centre of financial districts proudly showing off their history. In the executive dining room of the New York Stock Exchange, for example, hang the portraits of past chairmen, and in the corner stands a magnificent Faberge egg donated to the exchange by Tsar Nicholas II at the start of the century.


That is not Tradepoint's style. Its office is in London's Soho, better known for opera, Chinese restaurants and more recently for being one of London's gay meccas. It is only one of several businesses in the building, and the walls are adorned with posters of pop art by Ray Lichtenstein.




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