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including every transaction made on the stock markets which counts in the hundreds of millions if not billions a day

sure about that? The LSE says about 500,000 transaction per day (about £3bn per day but the proposal was per transaction)

Visa says about 200 million txns per day., with Mastercard (100m) and Amex (14m) you're still way off "trillions".

so overall, I make that less than 400 million - $4m in tax revenue per day, still quite a bit short.

(other stat I found said 26.2 billion credit card transactions per year in the US alone.)

I don't think they are patent trolls, somehow.

http://en.wikipedia.org/wiki/BT_Group

Don't know about that. the NYSE and LSE charts havethem not selling so well. If you can't produce a profit, produce a law suit.

Any publicity is good publicity.

Perhaps this is why Samsung stock is only traded on the Korean stock exchange, and not in U.S.

So what happens if you replace "Wall Street" with "The City"? :-) (Samsung GDRs are traded on the London Stock Exchange.)

Most exchanges run in an 'auction mode' for short periods of time (5-15 min) several times a day. Often at the end of the trading day to define the 'closing price'. During an auction bids and asks are accepted, but executed only when the auction changes. So it differs from your model only in two points:

1. 1. The execution time is known, so still speed sometimes may be useful if you want to modify your order just before the execution
2. 2. It is not enforced. And what would be to point of enforcing it to be 'the execution model' and banning other kinds of exchange?

Here you can find more details on how it is done on major European exchanges:

http://www.londonstockexchange.com/traders-and-brokers/rules-regulations/exchange-delivery-settlement-price.htm

http://www.eurexchange.com/trading/market_model/matching_principles/auction_principles_en.html

Or SETS.

Hmmm, I'm not sure how you think I'm changing my original point, but okay.

The #1 reason for switching has to do with performance. The system they've chosen is very stripped down in comparison with TradElect, allowing for greater speed. It also is more flexible, which is useful since the LSE operates other exchanges trading engines as well. Reliability is a major factor as well, agreed.

Whilst the LSE is 5th by market cap, they also run trading for Borsa Italiana, small parts of the Tokyo Stock Exchange, and the Johannesburg Stock Exchange. In total managed market cap that puts them at #2 behind the NYSE. No idea where you got that 9th figure.

I also don't know where you're getting this idea that perf was unimportant, but you can forget it. I can assure you that in the stock exchange business, speed is king. They would happily suck up somewhat increased operational costs if they could speed up the trading, since their profits would soar. The problem with TradElect is that it doesn't scale too well, so their costs rise faster than profits as they boost it's performance. With the MIT acquisition they're getting an even better deal: increased speed plus hopefully lowered costs.

Increased speed encourages companies and brokers to work with you, it encourages smaller exchanges to run on your systems, it increases the money you can make from co-location. Not only that, it obviously also allows you to greatly expand your listings base should you choose to do so, and go after massively increased volumes. From their own press release: "commitment to strive for performance enhancements and efficiency in the markets we operate, ultimately delivering value to our clients". It doesn't mention TCO or costs anywhere there.

Wrong exchange.

TradElect is the Exchange's world-beating trading system. It brings unprecedented levels of performance, enhanced functionality and new services to our markets.

TradElect allows our customers to trade on one of the fastest, most reliable and technologically advanced equity markets in the world. After the performance upgrades introduced over the last year the trading system delivers and an average round-trip latency of around 4 milliseconds, and a trading Capacity of 18,000 orders/sec.

TradElect was part of the Exchange's Technology Roadmap (TRM) project.

Borsa Italiana and the London Stock Exchange are currently working to integrate their systems in order to improve the performance, tradability and access across asset classes and markets for all of our customers.

They don't even mention stability. Outstanding.

"They're abandoning TradElect and the platform it happened to be on. The OS is really a background to all of this. The primary cause of the switch has more to do with TradElect sucking than anything else

What exactly were the problems with TradElect and not caused by the underlying platform. According to this an 'external test environment' was in place, at least since Jan 2009.

"Availability of the external test environment (Customer Development Service or CDS) for TradElect and Infolect: early January 2009"

"Using the Microsoft® .NET Framework in Windows Server® 2003 and the Microsoft SQL Server(TM) 2000 database, the new Infolect® system .. with support from Microsoft and Accenture, shows the London Stock Exchange's leadership in developing next-generation trading systems"

here their status page.
http://www.londonstockexchange.com/en-gb/products/membershiptrading/tradingservices/Incident/LIVE

same below, but may not render properly

Incident Updates
Time Market Status Exchange Action
Client Impact
Client action
6.43pm Market Closed

The Exchange regrets the earlier interruption to trading and is conducting further investigations. It is in the process of confirming all of the steps necessary to ensure trading can commence as scheduled tomorrow.

Further updates this evening will be published on this website.
Monitor this Website.
4.49pm Market Closed Closing auction has now finished. Closing prices, where relevant, have been disseminated.

4.21pm Closing Auction

This is to inform you that due to on-going connectivity issues to resume a fair and stable market the Closing Auction will commence from 16:21 onwards. The Closing Auction will uncross as scheduled at 16:35 onwards (subject to a 30 second random period).

4.00pm Continuous trading
Standard trading schedule will be followed for the remainder of the day.

3.45pm Auction

The auction will uncross at 16:00 BST (subject to a 30 second random period) at which time continuous trading will resume.

There will be no further change to the remainder of the trading day. Therefore, the Closing Auction will commence as scheduled at 16.30 and uncross at 16:35 (subject to a 30 second random period).

From this time market maker quotes in both quote and order driven markets will be firm.
Prepare to resume trading
3.30pm Auction
The International Order Book and International Bulletin Board will NOT be available for automatic execution for the rest of today.

No closing prices will be issued in these trading segments (IOB, IOBU, ITBB and ITBU) today.

The remaining Trading Segments will remain in an auction phase. A further update will be provided.

3.11pm Auction

We will be re-enabling connectivity from 3.15pm

Connectivity will be phased and following completion all order book segments will remain in an auction phase.
Once connectivity is established orders can be entered and deleted, but no electronic execution will occur until the uncrossing and commencement of continuous trading.

2.38pm
Auction To ensure consistent connectivity we are suspending connectivity to trading for a short period from 2.45pm

Once connectivity is established orders can be entered and deleted, but no electronic execution will occur until the uncrossing and commencement of continuous trading.
During this time customers are required to reset their log on connection status to ensure legitimate connections can be established once connectivity is re-enabled
2.20pm Auction
We are continuing to establish connectivity with our customers. This process is taking longer than expected.

A further update will be provided.

Once connectivity is established orders can be entered and deleted, but no electronic execution will occur until the uncrossing and commencement of continuous trading.
1.13pm Auction
We are continuing to establish connectivity with our customers.

A further update will be provided shortly.

Once connectivity is established orders can be entered and deleted, but no electronic execution will occur until the uncrossing and commencement of continuous trading.

12.30 Auction
We are continuing to establish connectivity with our customers.

Continuous trading will re-commence at the end of the auction period. We will provide at least 15 minutes notice of when we plan to end the

Nick Illidge Financial Markets Sales Manager at Microsoft UK "We are delighted that the London Stock Exchange has selected the Windows platform to base a significant part of its business on. This is further evidence of the enterprise scalability of the Windows franchise. We see our relationship with the Exchange and Accenture as a strong partnership. The Exchange is bold in its technology vision, Accenture provides the capability to deliver this vision, and Microsoft is providing the core technology to help provide the business benefits that the Exchange is looking for."

David Lester CIO at the LSE says ... that the LSE "is the only exchange in the world not to have had a single outage in six years."

"This is all about the question, 'How are we going to take over the world?'" says Lester, "... I believe this system -- because it's fast, agile and reliable -- will help us compete better. Our current system has to go down for four hours every evening to get ready for the next day's trading," he says. "The batch processing is '80s and '90s technology. You can't run a global market with a system that has to be down for four hours."

Here's a great factoid
Before joining the Exchange in 2001, David worked for Thomson Financial and Accenture.

Here: http://www.londonstockexchange.com/en-gb/products/membershiptrading/tradingservices/Incident/LIVE
Notice that there were several unsuccessful attempts to bring it back up.
What's really pitiful, LSE has just a fraction of data/trade volume of major US exchanges like Nasdaq or NYSE and still, their systems are regularly getting hosed, albeit not as much as today's meltdown.
Hopefully in coming years LSE will lose market share to Nasdaq/Europe, BATS/Europe, Chi-X and other electronic markets - that should teach them well.

look for more info here: http://www.londonstockexchange.com/en-gb/products/membershiptrading/tradingservices/Incident/LIVE

In reality, hardly a blip occurred on the stocks. It seems as though they only went down about 5% and are totally rebounding now. http://www.londonstockexchange.com/en-gb/

some farcical future dystopia is not the way to take your analysis of how things actually are taken seriously.

You continue to pretend that there's something here to take seriously.

Come back in 1000 years and tell me how things actually are. Even then, Capitalism will still be wet behind the ears... The process by which people obtain money and goods that we now call "capitalism" is a tiny baby in the grand scheme of things compared to, say, fiefdom, or religious tithing. How many eons has the entire animal kingdom run with "the strong kills the weak and takes everything" before mankind invented civilization? How many millenia has mankind used the same excuse to force the serfs to turn over their produce to nobility based on simple birthright? Even after the creation of "employment" beyond the apprenticeship model of everyone being an apprentice to someone else before going to work for yourself, the modern form of investment capitalism has only been around a little more than 300 years. I'd say we've got at least 1000-2000 more years to go to see if we've got the Right Way or not.