AN influential British parliamentary committee yesterday accused the London Stock Exchange (LSE) of lacking strategic direction and, "having difficulty following a coherent policy through to fruition".
The Treasury Select Committee's findings came in the interim results of its investigation into the future role and competitive position of the LSE, Europe's biggest bourse.
The MPs' report said that a major problem with the LSE had been an appearance that short term sectional interests, in particular those of market makers, had sometimes predominated and blocked necessary change.
The LSE's own proposals to move to an order driven from a quote driven system of trading shares reflected a dilution of its commitment to a policy that "has the balance of intellectual arguments on its side and the support of a varied and large number of investors", the committee said.
Under an order driven system, buy and sell orders are automatically matched by computer.
At the moment, prices are set exclusively by primary dealers, known as market makers, who post quotes on their screens.
The LSE is currently undertaking a series of consultations with market players on its proposals to move to order driven trading, the results of which are likely to be published at the beginning of August.
The parliamentary inquiry was launched in January after the surprise sacking of LSE chief executive. Mr Michael Lawrence brought to a head bitter disagreement about the way forward for the London market. Mr Lawrence has since been succeeded by Mr Gavin Casey of international investment bank Merrill Lynch, who takes up his new position in August.
