Warsaw Bourse Won't Reduce Latency On Current Engine - CEO

The Warsaw Stock Exchange doesn't plan to significantly increase speed on its current trading engine as transaction times satisfy the needs of the market, WSE Chief Executive Ludwik Sobolewski told Dow Jones Newswires.

"At this time, there is no need to reduce latency, as it complies with the needs of our members, including foreign members," he said. "It would be art for art's sake."

Sobolewski added that latency - the time it takes between an order being sent and the recipient getting it - has been reduced three to four times over the past four years. The current latency is 41 milliseconds and the 9-year-old Warset system is capable of handling around 700 orders a second.

The London Stock Exchange Group PLC (LSE.LN), which is reportedly interested in acquiring the Warsaw exchange, said in August its latency was at 2.7 milliseconds with the goal of increasing speed to sub-millisecond.

Sobolewski said Monday the Warsaw Stock Exchange could increase transaction speed significantly when it replaces the Warset engine at an unspecified time in the future.

Warsaw traders believe there is currently little need for lower latency as algorithmic, or automated, trading hasn't yet become popular on the Polish stock market.

"Automated trading practically does not exist, while brokerage houses also take quite a bit of time to process orders," a trader said. "Setting new speed records by the exchange would thus not change the picture."

Sobolewski declined to provide details of the due diligence process currently underway by several large exchanges interested in the acquisition of the Warsaw exchange.

"The due-diligence process is going ahead as planned," he said.

In July, Poland's Treasury short-listed four exchanges - Deutsche Boerse (DB1.XE), LSE, Nasdaq OMX Group Inc. (NDAQ) and NYSE Euronext (NYX) - to conduct due diligence on the exchange.

The Polish government plans to sell a majority stake in the WSE, or Gielda Papierow Wartosciowych w Warszawie SA, by the end of 2009, as part of its ambitious privatization plan, which aims to raise 12 billion zlotys ($4 billion) this year.

Company Web site: http://www.wse.com.pl

-By Marcin Sobczyk, Dow Jones Newswires; [phone]; [e-mail]