London Stock Exchange cuts fees

London is having to fight to keep its position as Europe's biggest exchange

The London Stock Exchange (LSE) has cut the fees it charges traders as a response to increasing competition.

Since new rules came in last year, the LSE no longer has a monopoly in share trading and new rivals have sprung up.

The latest entrant is Turquoise, which is testing its trading systems before becoming fully operational this month.

The LSE says the move to reduce fees makes it very competitive across Europe and should increase growth, improve efficiency, and attract new business.

The first of the LSE's new competitors in Europe, Chi-X has been operating for 14 months. By July 2008 it had captured 13% of the region's share trading market.

Other European exchanges including the Deutsche Boerse have also been cutting fees in an effort to fight back against the new share trading companies.

The changes in stock market rules were implemented by the European Union as part of its Markets in Financial Instruments Directive, and were aimed at shaking up the traditional exchanges and reducing the cost of trading.