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The success of the London Stock Exchange's electronic order book, known as the Stock Exchange Electronic Trading System (Sets), has been mixed. Stock Exchange Chief Executive Gavin Casey believes that the financial crisis in Asia has shown that Sets can perform well under pressure. However, the book only handled 32% of trading in FTSE 100 shares in the three months of trading after its launch on Oct 20, 1997. The average spread between buying and selling prices on the order book has reduced to 50 basis points, from 62 basis points under the old market-making system. This is a smaller reduction than some institutional investors had anticipated.

The London Stock Exchange has experienced a number of difficulties with its Sets electronic order-driven trading system. The system has performed well from a technical point of view, but there has been a serious problem with discrepancies between how traders actually use it and how the Stock Exchange would wish traders to use it. The Exchange has intervened directly in market trading in order to address fears of 'rogue' closing prices on New Year's Eve 1997.

Wild fluctuations in shares on Asian equity markets have caused considerable concern among investors. This has in turn presented a serious challenge for the London Stock Exchange's new order-driven computer system. The proportion of trades in FTSE 100 stocks undertaken through the automated computer rather than through market-makers declined on Oct 21, 1997, from 42% to 34%, but rose again on Oct 22, 1997, to around 40%. Some dealers reported that it was impossible to trade in some stocks.

UK business information group Reuters Holdings already leads the world market for foreign exchange trading systems, and is now expanding in US equity markets with the purchase of Quotron, data service business. The company's recent return to making acquisitions has pleased analysts, who were concerned that it was present only in mature markets, and it is now regarded as having good prospects compared with other media companies. It is now taking a more speculative approach, and plans to further increase its capital expenditure.

The future of the international electronic futures trading system Globex is uncertain given its failure to attract members, and the low trading volume on Globex. Globex was developed by Reuters, the Chicago Board of Trade and the Chicago Mercantile Exchange, and the agreement between the partners is due be renegotiated in April 1994. The failure of Globex is partly due to the competition between futures exchanges, but also to the basic question of whether the futures market will ever be global enough for the system to be profitable.