London Stock Exchange Group Plc is in talks with Singapore Exchange Ltd. to provide technology to clear cash equities for Southeast Asia’s biggest bourse operator, three people familiar with the matter said.
A deal would see LSE’s MillenniumIT unit implement a securities-processing platform for SGX, according to the people, who asked not to be identified as the talks are private. SGX isn’t planning to use MillenniumIT for derivatives clearing and the companies aren’t discussing a merger or a stake purchase, the people said.
An agreement would mark another link between the exchanges after they introduced trading in the largest and most active stocks on each others’ markets. LSE, which bought Colombo-based MillenniumIT in 2009, is seeking to increase revenue from technology and clearing to offset declining volumes.
An e-mail from LSE’s press office said the London-based exchange wouldn’t comment on speculation. Joan Lew and Carolyn Lim, spokeswomen at SGX, didn’t immediately return calls and an e-mail seeking comment.
MillenniumIT already provides clearing technology for the Argentina Central Securities Depositary and trading systems for Norway’s Oslo Bors, according to statements on its website. LSE is the majority owner of LCH.Clearnet Group Ltd., the world’s largest swap clearinghouse.
SGX Chief Executive Magnus Bocker is trying to boost equity trading volumes that averaged about S$1.5 billion ($1.2 billion) a day this year, a 37 percent decline from 2007, according to data compiled by Bloomberg.
SGX earned S$54.4 million in revenue from securities clearing in the three months ended Sept. 30, a 17 percent increase from the same period a year earlier, according to a regulatory filing. Derivatives revenue climbed 16 percent to S$51.7 million.