Lseg Annual Report 2011

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DISCLAIMERThis PDF is an exact copy of the Annual Report and Accounts of London Stock Exchange Group plc asprovided to shareholders. The audit report is set out on page 63.

The maintenance and integrity of the London Stock Exchange Group plc website is the responsibility ofthe directors; the work carried out by the auditors does not involve consideration of these matters and,accordingly, the auditors accept no responsibility for any changes that may have occurred to thefinancial statements since they were initially presented on the website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statementsmay differ from legislation in other jurisdictions.


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Delivering on our strategy

Getting in shapeLeveraging our assets

Developing opportunities

Annual Report 2011


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Welcome to our Annual Report

London Stock Exchange Group sits at the heart ofthe worlds nancial community. The Group provides

a broad range of international equity, bond and derivativesmarkets, including London Stock Exchange; BorsaItaliana; MTS (Europes leading xed income market);IDEM derivatives; and Turquoise, offering pan-Europeanlit and dark equity trading, together with equity derivativesfrom June 2011.

Through its markets, the Group offers domestic and

international businesses unrivalled access to Europescapital markets. The Group is a leading developer ofhigh performance trading platforms and capital marketssoftware and also offers its customers around theworld an extensive range of real time and referencedata products and market-leading post trade services.

Headquartered in London, with signicant operationsin Italy and Sri Lanka, the Group employs over

1,500 people worldwide.

Further information on London Stock

Exchange Group can be found at

www.londonstockexchangegroup.com


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Overview

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For further information visit: www.londonstockexchangegroup.com

London Stock Exchange Group plc Annual Report 2011

IntroductionAn overview of our business, the marketsand regulatory environment in whichwe operate, our vision and strategy,and statements from our Chairmanand our Chief Executive.

Highlights 02Groupataglance 04W hatwedobusinessmodel 06Marketpositionandoutlook 08Chairmansstatement 10ChieExecutivesreview 12Strategyinaction 14

Business ReviewMore detail on each of our divisions,our performance, our approach to ouremployees, other stakeholders and ourwider community and the principalrisks and uncertainties that couldaffect our business.

Segmentalreview 15CapitalMarkets 16PostTradeServices 20InormationServices 22TechnologyServices 24Financialreview 26Ourwiderresponsibility 30Principalrisksanduncertainties 32

GovernanceAn introduction to our Board ofDirectors, our approach to corporategovernance and how we rewardperformance, along with otherstatutory and regulatory information.

BoardoDirectors 38CorporateGovernance 40AuditandRiskCommittee 46RemunerationReport 48DirectorsReport 58Directorsresponsibilities 62orthefnancialstatements

Group financial statementsDetailed nancial information settingout our performance for the yearand nancial position at year end,together with the report thereon byour independent Auditors.

AuditorsReport 63Consolidatedincomestatement 64ConsolidatedStatemento 64ComprehensiveIncomeBalancesheets 65Cashowstatements 66Statementochangesinequity 67Notestothefnancialstatements 68Financialrecord 101

Shareholder informationAn explanation of how trading marketsare structured, a glossary of termsused in this report and other informationfor shareholders.

Marketstructures 102Glossary 104Financialcalendar 106Investorrelations 107 Investorrelationscontacts 108


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2007

2008

2009

2010

349.6

564.4

671.4

628.3

Total Income (+7%)m

2007

2008

2009

2010

56.2

73.1

74.2

60.1

Adjusted Earnings per share* (+23%)Pence

2007

2008

2009

2010

185.6

289.0

340.7

280.3

Adjusted Operating Profit* (+22%)m

2007

2008

2009

2010

18.0

24.0

24.4

24.4

Dividends per share (+10%)Pence

02 Overview


Highlights

Financial highlights

* London Stock Exchange Group uses non-GAAP performance measures as key nancial indicators as theBoard believes these better reect the underlying performance of the business. See non-GAAP denitionson page 101 for further information. Adjusted operating prot and adjusted earnings per share excludeamortisation of purchased intangibles, goodwill impairment and non-recurring items.

Year ended 31 March

2011 2010 Variance %

Total income 675m 628m 7

Adjusted operating prot* 341m 280m 22

Operating prot 283m 182m 56

Adjusted prot before tax* 296m 242m 22

Prot before tax 238m 144m 65

Adjusted basis earnings per share* 73.7p 60.1p 23

Basic earnings per share 56.4p 33.8p 67


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Capital Markets 281.5

Post Trade Services 150.6

Information Services 184.7

Technology Services 48.6

Other 9.5

Group income by segmentm

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03Overview Highlights


Operational highlights

Good progress has been made in the year in delivering on our strategy to improveoperational efciencies and leverage Group assets:

MillenniumIT high performance trading system successfully implementedfor Turquoise and for the UK cash equities market

Stabilisation of share of order book trading of UK equities following tariffchanges and reductions to post trade costs

Migration of the IDEM market to the SOLA derivatives platform

Development of pan-European equity derivatives through Turquoise

New customers won by MillenniumIT, including the Johannesburg Stock Exchangeand the Mongolian Stock Exchange

Post Trade Services extended; growth in underlying volumes and active treasurymanagement at our CCP operation improved net treasury income

New real time data pricing and separate, low cost post trade price and tradinginformation service, providing users with further choice, facilitating greatertransparency of such data and helping market data distributors provideconsolidated data solutions

Launch of new information products, including UnaVista Conrmationand Swaps Portals; and new technology services with further data centreco-location enhancements

Services developed for retail investors: lower cost trading through PrivateClient Broker incentives, lower cost real t ime data and additional bondsadded to retail bond platform (ORB)


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04 Overview


London Stock Exchange Group is a leading diversifed exchangebusiness, incorporating Borsa Italiana, London Stock Exchange

and MillenniumIT. The inormation below and on the next pageprovides an outline o our business model.

Group at a glance

Total income contribution Sub-segment Main types of revenue

Capital MarketsAt the heart of what we doare our markets in Londonand Italy and increasinglythroughout Europe

281.5 million2010: 295.3 million

42%Total Group income

Primary Admission fees for initial listingor raising further capital

Annual fees for securities tradedon our markets

Secondary Fees based on value traded (UKequities and Government bonds)or number of trades (Italian equities,

retail bonds and derivatives)

Other Membership fees to access any ofour trading markets, such as SETS

Post Trade ServicesWe offer open and efcientclearing, settlementand custody services. Ourpost trade business supportscash equity, derivative andxed income markets

150.6 million2010: 116.2 mi llion


Clearing Fees based on trades or contractscleared, and Central Counterparty(CCP) services provided

Net treasuryincome

Net interest and fees on cashand securities held for margin

and default funds

Settlement Revenue mostly comes from thesettlement of equity and xedincome trades

Custodyand other

Fees are charged on the issuance ofan equity or xed income asset, whendividend and interest payments aremade, and on any corporate action

Information ServicesWe sell real time and referencedata to market users

184.7 million2010: 169.3 mi llion


Data charges Fees primarily based on numberof terminals taking our real timeprice and trading data

Other information Fees vary based on the nature of serviceprovided, for example a licence feeis paid to gain access to the SEDOLsecurities numbering system

Technology ServicesOur businesses and customersdepend on technology thatis secure and performs tohigh levels of availabilityand throughput

48.6 million2010: 39.4 million7%Total Group incomeNote: Other income 9.5m, 1% Total Group Income

MillenniumIT Sales of technology services Distribution of IT hardware and software

in Sri Lanka and to internationalcapital market customers

Technology Fees for network connectionsand systems supplied by

Group businesses


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Overview Group at a glance

Customer profile Highlights KPIs

Companies from 70 countries around theworld have come to our markets to raisemoney for growth, together with issuersof bonds, ETFs and other assets

185 new companies joined our marketsin the year

New admission to trading service forDepositary Receipts

Numberocompanies

onourmarkets

2,9382010: 3,046

Capitalraisedbynew

andurtherissues

40 billion2010: 77 billion

Banks and brokers worldwide, trading onthe Groups equities, derivatives and xedincome trading platforms

Share of trading stabilised during theyear, at 63.5 per cent in the UK, and84.0 per cent in Italy

MTS, the trading platform for Governmentbonds, total value traded up 51 per cent

Averagenumbero

equityorderbook

tradesperdayinItaly

257,0002010: 252,000

Averageequity

valuetradedper

dayinLondon

4.7 billion2010: 4.6 billion

Banks and brokers worldwide Integration of London and Italianmarkets has facilitated cross-membership

Memberfrmsconnectedtoourmarkets

5322010: 530

171 members, mainly banks andbrokers, over 40 per cent of whichare based outside Italy

Introduction of guarantee servicefor the interbank collateralised depositmarket in Italy

Numberoequityandderivative

contractscleared


Clearing members Active treasury management of margins from increased derivatives

and xed income trading in Italy

Averageinitialmarginheld

6.9 billion2010: 4.5 billionWide range of Italian and internationalbanks and brokers for both on marketand OTC trades

Settlement rate of 99.5 per cent exceedsthe Bank for International Settlementsquality standards

Settlementinstructionshandled


Issuers of equity and xed incomeproducts (mostly Italian based)

Government and corporate bondissuance remained at high levels

Sale of Servizio Titoli in May 2011

MonteTitoliscustodyassets

undermanagement

3.02 trillion2010: 2.87 trillion

Service providers, such as Bloombergand Thomson Reuters, that incorporateour data with other information and sell

onto users

Introduction of direct billing andnon-display tariff initiatives

Numberoproessionalterminalstakinggroup

data(93,000Londondata;139,000Italiandata)

232,0002010: 235,000

Our customers vary based on theservice provided, including fundmanagers, traders, retail brokersand market makers

Acquisition by FTSE of the FXI Xinhuabusiness providing indices for China(previously a joint venture)

Numberoinstrumentscontainedinour

SEDOLMasterfle

19 million2010: 10 million

Other London Stock Exchange Groupdivisions, other exchange groups andcapital market clients, banks, IT andother large Sri Lankan companies

MillenniumIT has entered into agreementsto provide systems to the JohannesburgStock Exchange and the MongolianStock Exchange

LatencyonUKtradingplatorm(at average

o99thpercentile)

113 microseconds2010: 1.4 milliseconds

Banks, trading rms and depositoriesin Europe, North America, Africa and

Asia-Pacic region

Implementation of Millennium Exchangetrading system for Turquoise and UK

cash equities market

AvailabilityoUKequitymarketduringtheyear

99.83% uptime2010: 99.84%


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06 Overview


What we do business model

We provide services to a broad set o clients across a rangeo asset classes and unctions. This section provides an overview

o the Groups activities and their inter-connections.

More information SeetheSegmentalReviewsection

(pages15to25)oranupdateondevelopmentsineachmainbusinessarea.

ReadtheFinancialReview(pages26to29)ordetailsobusinessperormanceoverthepastyear.

Information & Technology Services

Our central economic function is to bring together companiesseeking capital with investors from around the world.

Primary marketOur primary markets in London and Italy provide companiesfrom around the globe with cost efcient access to someof the worlds deepest and most liquid pools of capital.

Initial Public Offerings(IPOs)99 (2010: 50)

Companies on our markets2,938 (2010: 3,046)

Market capitalisation

2.4 trillion(2010: 2.3 trillion)

Amounts raised 13.1 billion in new issues

(2010: 3.9 billion) 27.2 billion from

further issues(2010: 72.6 billion)

ETFs and ETCs listed 1,345 (2010: 861)

Capital Markets

Real time data

We supply real time prices and trading data creating thetransparency and liquidity that are essential for marketusers. This data is of high value, used and referencedby market participants and other trading services as itis price forming information. As well as providing feedsdirectly to clients, we also distribute through providerssuch as Bloomberg and Thomson Reuters. They incorporateour data with other information and sell to trading rms,investors and institutions around the world.


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Overview What we do business model

The Group provides afull range of Post Tradeservices. Based in Italy,CC&G provides clearing

services and Monte Titolipre-settlement, settlementand custody services.CC&G will provideclearing services forTurquoise Derivatives.

More Post Tradeinformation is providedin Market Structures,pages 102 to 103.

EquitiesOur systems allow ourmembers to electronicallytrade equities listed on ourmarkets. The majorityof trading takes placeon our Main and AIMmarkets both in Londonand Italy. ThroughTurquoise (acquired in

February 2010) traderscan now also accesspan-European andUS equities.

Fixed incomeThe Groups MTS andMOT businesses provideplatforms for the tradingof Government andcorporate bonds. InFebruary 2010, theGroup launched a newUK electronic order bookfor bonds, modelled on

the Italian MOT retailbond market whichprovides access forretail investors.

DerivativesOur experience of runningour primary markets hasenabled us to developderivative markets forthe trading of emergingmarket equity derivatives,particularly Russian. IDEMis our derivatives marketfor Italian equities, and

Turquoise will launchpan-European derivativesfrom June 2011.

Other information

To facilitate efcient trading on our markets, we havedeveloped a number of other reference, desktop andworkow products, which we make available to institutions,traders, retail brokers and market makers including:

SEDOL unique security identier numbering system UnaVista trade matching and reconciliation service RNS Regulatory News Service Proquote market data system FTSE index provider (joint venture with The Financial

Times Ltd)

Technology

Electronic trading in London has developed signicantlysince rst introduced by Big Bang in 1986. Now all ofour businesses depend on technology that is secure, stableand performs to high levels of availability and throughput.The trend towards high frequency, highly automatedtrading continues and we are investing to increase thespeed and capacity of our trading services, as well asto provide new functionality, such as that required fordark pool trading. With the acquisition of MillenniumIT,we have an agile, efcient, in-house IT developmentcapability that will serve the Groups capital marketsbusinesses. MillenniumIT also sells and licences exchangerelated technology and services to capital marketsbusinesses across the globe.

Post Trade Services

Secondary marketOur systems provide fast and efcient trading, allowing investors and institutions accessto UK and Italian equities (as well as European and US equities through Turquoise),international depositary receipts on our International Order Book, European corporate

and Government bonds, and equity and index derivatives (Italian, Norwegian and Russian).


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4.9

4.9

7.0

5.1

4.3

4.0 4

.1 4.4 4

.5

3.7

4.9

5.0

LSE daily value traded

5.2

4.9

4.9

7.0

5.1

4.3

4.0 4

.1 4.4 4

.5

3.7

4.9

5.0

8.0

63.2

61.4 6

2.1

63.7

63.2

62.4

64.5

63.4

63.1

65.1

64.1

65.2

64.4

LSE order-book value traded and share of trading

Mar2010

Apr2010

May2010

Jun2010

Jul2010

Aug2010

Sep2010

Oct2010

Nov2010

Dec2010

Jan2011

Feb2011

Mar2011

10%

20%

30%

40%

50%

60%

70%

80%

90%

1AverageDailyValuetradedbn

2

3

4

5

6

7

8

9

FTSE 100

Mar

2009

Jul

2009

4,000

3,500

4,500

5,000

5,500

6,000

6,500

Nov

2009

Mar

2010

Jul

2010

Nov

2010

Mar

2011

FTSE MIB

Mar

2009

Jul

2009

14,000

12,000

16,000

18,000

20,000

22,000

24,000

Nov

2009

Mar

2010

Jul

2010

Nov

2010

Mar

2011

08 Overview


Market position and outlook

Exchanges provide the primary location or capitalraising, transparent price inormation, trading acilities

and post trade services that capital markets need inorder to unction efciently.

During the year a number of Eurozone countries credit ratingswere downgraded, notably Greece, Ireland and Portugal. Thishad a signicant impact on the level of trading in many sovereign

debt products. ECB initiatives and Government support havehelped stabilise the position and we saw some recovery in xedincome trading volumes in the latter part of the year.

Looking ahead, we believe that these improvements, alongwith other structural changes, indicate that a steady recoveryin secondary market activity is underway.

Exchanges operate on an increasingly international basis,in an environment of continued globalisation of capital owsand a need to provide clients with efcient services on a widerglobal basis. Against this backdrop, in February this year, weannounced our planned merger with TMX Group which willcreate the worlds leading listing venue and the fourth largestexchange by revenues. We believe that a merger with TMXis strategically compelling and will create a more diversied

business with greater scale, scope, reach and efciencies,and exposure to broader economic inuences.

During the year, principal global indices have continued toshow strength leaving behind the lows of early 2009 (graphsbelow). Furthermore, equity trading levels have also startedto show an improvement.

Evolution in our markets continues to be driven by structuralshifts in the economy and wider geopolitical environment,regulatory change and technological innovation. For anexplanation of Market Structures, see pages 102-103.

Economic conditionsThe past year has been characterised by further globaleconomic recovery although some uncertainty continues toexist in the market, which is potentially constraining investorcondence and growth. This includes the effects of the tragic

Japan earthquake, unrest in North Africa and the Middle Eastwith related concerns over possible contagion into other developingmarkets, and the continuing sovereign debt concerns in someEurozone countries. Our own domestic economies, in the UKand Italy, remain sluggish as Governments restrict spendingin order to balance their books.

This year, we have experienced increased numbers of initialcapital raisings on our international markets as companiesin developing markets start to benet from the recovery.We expect this trend to continue as these markets growand companies fund further expansion. Our position asthe pre-eminent global listing brand means the Group iswell positioned to compete and benet from this growth.

Despite the mixed market conditions, our strategy has successfullydelivered a stable share of value traded over the year at an average63.5 per cent for UK cash equities and 84.0 per cent for Italianorder book trading.


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Overview Market position and outlook

Regulatory DevelopmentsIn recent years, regulation and technology have transformed thecapital markets into a global marketplace by removing the barriersto cross-border trading and lowering the costs of entry for newproviders of trading services. This has led to greater competition:there are now over 40 active equity trading venues in Europe alone.

In part due to G20 commitments, regulation of nancial servicesremains a key priority of national and EU Governments and islikely to have signicant effects on the environment in which

we and our customers operate.European regulatory reform is proposed across a broad rangeof activities, including:

Markets (MiFID II) increased pre and post trade transparency for all non-equity

asset classes, including bonds and derivatives; improved quality of post trade data in order to counter the

effects of fragmentation and enable consolidation of such data; increased harmonisation of standards across regulators

and trading venues; increased regulatory oversight of the activities of non

pre-trade transparent trading venues, broker crossingsystems and OTC trading;

assessment of the impact on EU markets of proprietary

trading and high frequency trading strategies; and importance of SME funding and markets.

OTC Derivatives & Clearing (EMIR) a move to mandate the use of CCP services for OTC

derivatives in order to better manage risk; harmonisation of European CCP standards and

requirements; and a move to mandate the reporting of OTC derivative

trades to Trade Repositories operating subject toharmonised standards.

Post trade measures to harmonise the operation of central securities

depositories and harmonise the law related to the holdingand disposition of, and the possession of the rights attaching

to securities, held through securities accounts.

Short selling a regulation to restrict the ability of investors and market

participants to undertake short selling and to imposesettlement performance measures.

Capital Requirements (CRD4) further changes to the Capital Requirements Directive aimed

at increasing the resilience of the banking sector, includingthe introduction of liquidity standards and a leverage ratioand the strengthening of capital requirements forcounterparty credit risk.

In addition, it is expected that there will be EU proposalson the following areas: corporate governance, market abuse,issuer transparency, nancial transaction/activity taxesand crisis management, all of which may affect Groupoperations to some extent.

In the UK, the regulatory regime is in the process of beingrevised. The Government proposes creating a Financial PolicyCommittee responsible for considering macro-systemic risk,and transferring the micro prudential functions of the FSA to

the Prudential Regulatory Authority (PRA), a new subsidiaryof the Bank of England, and the conduct and markets functionsof the FSA (including the UKLA) to a new body, the FinancialConduct Authority (FCA). The FCA will represent the UK atESMA, the new European Securities and Markets Authorityand the PRA will represent the UK at the European BankingAuthority. These new European Supervisory Authorities, whichhave greater powers than their predecessor organisations, willbe responsible for some direct supervision activities, theimplementation of the above reforms and the developmentof the EU single rule book.

As an operator of regulated markets and MTFs, a regulatedcentral counterparty and a central securities depository,the Group is a stable, trusted and neutral provider of thefull range of market infrastructure in a broad range of assetclasses. We will continue to respond to the dynamic marketenvironment in order to create value for both customersand shareholders, by providing commercial, reliable,transparent and fully compliant products and services.

The implementation date for the European Central BanksTarget 2 Securities (T2S) project, aimed at facilitating cheapercross border settlement across Europe, has now been setfor the end of 2014. The ECB announced in January 2011 thatMonte Titoli has been accepted in Phase 1 of this importantproject, a move that has been universally welcomed by theGroups customers and key regulators. Our involvement andsupport of this key initiative evidences our commitment toquickly embrace market changes and to ensure that ourcustomers receive maximum benet from them.


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10 Overview


Chairmans statement

Market and operating environmentThe Group operates in an increasingly dynamic and fast pacedsector. In particular, the environment remains characterisedby widespread regulatory change and further exchangesector consolidation.

We are proponents of regulatory regimes that place greatvalue on efcient, transparent, independent and trustedcapital markets services. Currently, the EU is developing itsnew European Markets and Infrastructure Regulation (EMIR),

conducting a review of the Markets in Financial InstrumentsDirective (so-called MiFID II) and undertaking a largeinfrastructure project Target 2 Securities (T2S) in the posttrade landscape (see page 9 of this report for further details).

We are actively involved in these regulatory processes,providing responses to consultations, reviewing draft policyand seeking engagement with policy-makers. All of thisregulation will impact our business opportunities.

In the UK, the Government is currently consulting on a newapproach to nancial regulation. Again we are active in ourlobbying, focusing on themes of transparency, efciency,commerciality and the UKs attractiveness as a global nancialcentre. We have also been vocal on the need for London to have aneffective voice at an EU level. It is expected that the Governments

proposals will be implemented in mid-2011, with the aim ofintroducing a new regulatory framework by the end of 2012.

As domestic and international economies evolve, the Groupsequity and debt markets continue to provide an importantsource of nancing to business at home and overseas. Thisfunding function is essential for economic prosperity. The yearsaw strong overall growth in the number of new equity issues,up 68 per cent with a more than threefold increase in moneyraised by new issues. In particular, we were delighted to celebratethe 15th anniversary of AIM, our junior market, in 2010 and wehave been working closely with the Government and Europeanpolicy makers to nd ways of encouraging equity investment ingrowing businesses. AIM continues to play a pivotal role in thefunding of innovation and business success, in turn driving

economic growth, directly supporting 250,000 UK jobs. We arestaunch advocates of the importance of the SME sector and therole it plays in economic prosperity.

The actions that we have takento ensure our Company remainsefcient, competitive and ocusedon building increased scale,scope and reach, have put

us in a strong position.


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Overview Chairmans statement

Strategic DevelopmentWe aim to develop the Group further, with increasinginternational scale, together with extended reach and scopeto provide competitive services to global customers. Thisapproach underpins the rationale for our proposed mergerwith Canadas TMX Group, announced in February this year.We believe this transaction will create a leading diversiedinternational exchange group with exciting opportunitiesfor growth. The process of achieving necessary approvals isunderway and will include seeking approval from shareholders

of both companies.

Our focus has also been on driving efciency throughmanagement changes, cost reduction, client alignmentand new technology. The results are showing through inimproved operational and nancial performance, and theefforts in this area will continue.

The second pillar of our strategic approach, characterisedas leveraging our assets, is also delivering results. We haveannounced plans to launch pan-European equity derivativestrading in the rst quarter of the new nancial year. We havealso strengthened our equities trading offering, stabilisedour share of trading and have developed a number of newinformation and technology products.

The CEOs review and the update on strategy provide moredetail on our plans and progress.

Financial performanceIt has been a good year for the Group, set against the backdropof more stable though still highly competitive markets. We madereal strides in delivering on our stated strategy to deliver greaterefciencies and to grow existing Group operations.

Reecting the upturn in nancial performance, the Boardis proposing a 12.5 per cent increase in the nal dividend to18.0 pence per share, resulting in a dividend for the full yearof 26.8 pence per share, a 10 per cent rise. The nal dividendwill be paid to shareholders on the register on 29 July 2011.

Board of DirectorsWe have refreshed the Board with the appointmentsof Paul Heiden, Gay Huey Evans and Massimo Tononi asNon-Executive Directors, and the addition of Raffaele Jerusalmias an Executive Director. Angelo Tantazzi, Oscar Fanjul andNigel Stapleton stepped down during the year and we thankthem for their substantial contributions during their tenure.

Please see the Governance section of this report on pages38 to 63 for more details of the Board and our report on

Corporate Governance.

ConclusionLooking forward, we expect that regulatory changes,macroeconomic factors, competition and developmentsin the exchange sector will continue to exert considerableinuence on the way we operate and future opportunitiesfor the Group.

We are very much engaged with the processes that shape thesedevelopments. The actions that we have taken to ensure our Groupremains efcient, competitive and focused on building increasedscale, scope and reach have put us in a strong position. We lookforward to continuing to make progress and to further strengthenthe Group, as we enter a new phase in our global industry.

Chris Gibson-SmithChairman


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12 Overview


Chief Executives Review

We are a business in transformation,operating in a highly dynamic andevolving global industry; developmentof growth opportunities, continueddelivery on cost reductions, enhancing

our competitiveness and improvingcustomer service will remain pivotal tofurther progress in the year ahead.

Introduction and overviewWe have made good progress over the last year, with improvednancial performance and signicant steps taken in deliveringon our ambition to be, by scale and offering, a world-leadingdiversied exchange group.

Against a background of more stable although highly competitivemarkets, we achieved total income of 675 million, a sevenper cent increase. Adjusted operating prot was 341 million,a 22 per cent increase, as we maintained focus on cost control.

Growth across a range of Group operations illustrates theincreasingly diversied nature of our business.

The past year saw the cautious return of optimism to theeconomy and global capital markets. London remains aworld-leading centre for companies seeking to raise capital,both domestically and internationally, and the Group retainsan enviable franchise in helping issuers access capital andgenerate liquidity in secondary markets. We saw strong growthin the number of new issues and the pipeline across geography,sector and markets remains encouraging.

Following the introduction of a number of key initiativesdesigned to bring the Group closer to its clients, our shareof order book trading in UK cash equities has been stableover the year. Our xed income markets, MTS and MOT,

performed well and the IDEM derivatives market in Italyalso delivered good growth.

Our Information Services and Technology Services divisionsmade good progress. The number of users of the Groups realtime data remained broadly unchanged over the year comparedwith a period of reduced demand last year. Our other referencedata, desktop products, and FTSE Indices businesses all deliveredgrowth over the twelve months. Contributing to growth in theTechnology segment were MillenniumIT and other specialisttechnology services, including network connections andco-location of clients servers in our data centres. Furtherdetails on business performance and new developments areprovided in the review of strategy below and also in theBusiness Review section of this report.

Strategy ReviewLast year we set out a clear strategy for the development ofthe business, with customer focus and improving operationalefciency very much central to our plans. Our strategy isbroadly characterised as getting in shape, leveraging ourassets and developing opportunities. The imperatives arefourfold, namely to drive efciency, build scale, increasescope and extend reach.

Our strategic outline is more than a one year plan but we areundoubtedly making good progress.

Getting in shape drive efficiencyThe focus of initial management attention, getting in shape,was on reducing costs; implementing low cost, high performance

technology; improving client relationships; and adjusting tariffs,particularly with regard to improving our competitive positionin cash equities trading.


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Overview Chief Executives review

Pleasingly, we reduced our adjusted organic operating cost baseby eight per cent, reecting previously implemented headcountreductions and other savings.

Last year we conducted a full review of our technologyrequirements, resulting in the acquisition of MillenniumIT,an innovative, capital markets-focused software servicesbusiness. We embarked on an ambitious programme to swiftlyimplement MillenniumITs leading, high speed and highperformance equities trading technology across the Groups

markets. In October, we successfully completed the migrationof Turquoise, our pan-European MTF, onto the MillenniumExchange trading system. This was followed by the London StockExchange main UK equity trading market in February 2011. Thenew platform is running at least 10 times faster than its predecessorTradElect and delivering consistent world-leading average latencyof below 125 microseconds, fully meeting our requirements fora low cost and highly competitive trading system.

We continued the process started last year with the roll out of theTMX Groups derivatives trading technology, SOLA, to our IDEMmarket, following the successful earlier launch on EDX. This hasprovided IDEM clients with a faster and improved trading system.

Work to enhance our equity markets offering has driven signicantimprovements. We have negotiated improved pricing for clearing

and settlement services by external providers, which reduce theoverall cost of trading on our UK market; and we introduced newtariffs last May intended to incentivise trading which was wellreceived. Our share of trading, in what remains a competitivemarketplace, was stable throughout the nancial year at anaverage 63.5 per cent, and in Italy the share of order book valuetraded was also steady at 84.0 per cent.

Leveraging assets increasing scope and reachTurquoise, our pan-European MTF joint venture with 12 banks,which became part of the Group shortly before the start of thenancial year has made good progress, with a signicantly reducedcost base and a growing share of trading. Of particular note wasthe increase in dark pool trading, regularly occupying the numberone or two position among MTFs for much of the past year. We

have also recently announced plans to launch a pan-Europeanderivatives business through the creation of Turquoise Derivativesin combination with the Groups existing derivatives market, EDX,and use the SOLA platform already adopted by EDX. FTSE 100Futures will begin trading on this platform in June 2011, withfurther products planned, subject to obtaining relevant tradinglicences in some instances.

Post Trade had a strong year with total income up 30 per cent,driven in part by clearing an increased number of Italianderivatives and xed income trades which also resulted inhigher margin held by the clearing operation. Active risk andtreasury management of the cash margin in turn contributed toincreased net treasury management income. The Europeanpost trade landscape remains poised for widespread structural

re-denition and we continue to pursue a number of opportunitiesthat are available to the Group. In Information Services,Proquote, a cornerstone of our important retail strategy, has

had a transformational year, having been completely restructured,partnering with FactSet and recording a signicant surge in retailtrading volumes. We have also extended the UnaVista serviceto provide a Swaps Portal and a Conrmation Portal to helpclients automate processes and reduce costs and risk. We haveintroduced optionality for clients with new reporting structuresfor real time data use, and introduced new post trade dataservices, providing data in new forms to increase client choiceof the information they receive.

In Technology Services, MillenniumIT has signed agreementsto supply technology to a number of third parties, extendingthe number of users of its innovative systems including theJohannesburg Stock Exchange which recently announced itsintention to use Millennium Exchange, and the MongolianStock Exchange which signed a strategic partnership withthe Group to restructure and develop the national exchangeof the worlds third fastest growing economy.

Developing opportunities building scale and extendinginternational operationsThe last quarter of our nancial year saw the Group announcea merger of equals with Canadian-based exchange business TMXGroup Inc., to create a leading diversied international exchangegroup. As we set out at the time of the announcement, the merger

will create a group highly diversied across asset classes andgeographies, a leading global listings franchise, with signicantefciencies for customers, increased scale and reach, a strongbalance sheet and considerable growth opportunities. Over thecoming months we will continue to work on achieving thecustomary shareholder and regulatory approvals with the aimof completing the transaction in the autumn of 2011.

OutlookWe have had a good year, reporting a strong nancialperformance. I am especially proud of the energised teamI am surrounded by. People remain at the core of all thatwe do; from those on our highly successful new internationalgraduate scheme to experienced market practitioners, we areactively working together to drive the business forward. There

are many opportunities, especially in post trade, derivativesand nancial technology and I am excited about the future.We are a business in transformation, operating in a highlydynamic and evolving global industry; development of growthopportunities, continued delivery on cost reductions, enhancingour competitiveness and improving customer service willremain pivotal to further progress in the year ahead.

Xavier RoletChief Executive


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14 Overview


Strategy in action

We continue to work towards our vision to beone o the worlds largest exchange groups.

We are delivering this vision by executinga clear strategy:

Strategic imperatives Our strategy in action progress and plans announced to date

Getting in Shape

Drive Efciency

Price and technology competition

in our markets

Need to align with customers

for efcient services

cost reduction programme: as part of ongoing operationalmanagement to achieve headcount efciencies andtechnology savings our organic cost base reducedseven per cent

migration of EDX and IDEM derivative trading platformsto SOLA; and Turquoise and SETS to Millennium Exchange;further roll out of Millennium Exchange to all our equitymarkets planned

increased customer focus and new tariff structuresintroduced to incentivise greater volumes and increasecompetitiveness (particularly in UK cash equities) UK share of trading stabilised in year at 63.5 per cent

Leverage our assets and developing opportunities

Build Scale

Need to service global customers

Scale drives efciency

Better able to respond to

regulatory change

technology migration programmes achieving scaleon Millennium Exchange and SOLA trading platforms

successful development of dark and a pan-Europeanlit offering through Turquoise 34 per cent share ofpan-European MTF mid-point (dark) trading, thesecond largest MTF venue

proposed merger with TMX Group to increase Group scaleand extend the range and efciency of services to clients

Increase Scope

Increased diversication away from

core local markets

Ability to service customers in

multiple asset classes

Need to work closely with clients

to incentivise trading and developnew services

launch of the post trade MIC service and CCP serviceto the domestic MOT segment of Borsa Italianasxed income market

plans for Turquoise Derivatives well underway,combining with EDX; Trading of FTSE 100 Indexfutures to start June 2011

enhancement of co-location services to both tradingrms and solution providers located in the Exchangesdata centre

expansion of the UnaVista product suite to include

new Swaps Portal and Conrmation Portal Services

Extend Reach

Globalisation of capital markets

proposed merger with TMX Group to enhance and diversifythe range of Group products

strategic partnership with Mongolian Stock Exchangeto provide technology and assist in market development

a Letter of Intent with National Stock Exchange of Indiato evaluate joint strategic business opportunities

further global capital markets relationships establishedthrough MillenniumIT sales


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Total income

12

3

4

5

6

7

89

10

11

12

13

1415 16

Governance


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Overview

15


Business Review

We manage and report on the performanceof the Group in four principal segments:

Capital Markets Post Trade Services Information Services Technology Services

In addition, we provide sub-segmentalbreakdown of total income and activities,shown in the next column.

The following pages provide informationon developments over the past year.

The business is managed on a day to daybasis by an Executive Committee, comprising:

Xavier Rolet Chief Executive Ofcer

Doug Webb Chief Financial Ofcer

Raffaele Jerusalmi Director of CapitalMarkets and CEO of Borsa Italiana

See biographies on page 38.

Kevin MilneDirector of Post Trade Services

Joined the Group in 2010. Previously CEOof Xtrakter and senior manager at Euroclear.Has over 25 years of experience in nancialmarkets including Thomson Financial and Omgeo.

David LesterDirector of Information ServicesJoined the Group in 2001. Over 20 years experiencein nancial markets including Thomson Financial,Accenture and KPMG.

Antoine ShagouryChief Information OfcerJoined in 2010 from American Stock Exchange(now part of NYSE Euronext) where he was CIO.Previous experience includes Instinet Services

and Datastream Corporation.

Tony WeeresingheDirector of Global Development andCEO of MillenniumITJoined the Group in 2009. Prior to foundingMillenniumIT in 1996 he was Head of the OpenSystems Division of ComputerLand and CountryManager of Oracle in Sri Lanka.

The team meets regularly to review business andnancial performance, develop Group strategy, reviewproject development, set targets and agree actions.

Year ended 31 March 2011

Capital Markets m

1Annual fees 37.8

2Admission fees 33.0

3 Cash equities trading UK 86.4

4 Cash equities trading Italy 30.7

5 Derivatives trading 16.8

6 Fixed Income trading 32.4

7 Other Capital Markets 44.4

281.5

Post Trade Services

8 Clearing 35.9

9 Net treasury income through CCP business 51.3

10 Settlement 18.2

11 Custody & other 45.2

150.6

Information Services

12 Real time data 101.2

13 Other information 83.5

184.7

Technology Services

14 MillenniumIT 18.2

15 Technology 30.4

48.6

Other

16 Other revenues 9.5

674.9

Segmental review


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2007

2008

2009

2010

3,533

3,579

3,304

3,046

Number of companies

2007

2008

2009

2010

45

106

77

60

Money raisedbn

16 BusinessReview

LondonStockExchangeGroupplc AnnualReport2011

IntroductionTheGrouphasasuccessfultrackrecordofdevelopingandpromotingmarketsandsegmentstomeetthespeciccapitalraisingneedsofissuers.Byprovidingaccesstoadeeppoolofcapitalandefcientsecondarymarkets,weprovideliquidityinissuerssecuritiesandgreatervisibilityamongstinvestors,resultinginalowercostofcapitalforcompanies.

Asoneoftheworldsmostinternationalmarketsforlistings,wehaveseenimprovementintheIPOmarketinthepastyear.

Therehavebeen185newissues,a68percentincreaseyearonyear,andwehavehelpedcompaniesraiseatotalof40billioninnewandfurtherequityissuance,andenabledcompaniesandsovereignstatestoraise454billionofdebt.

Inoursecondarymarkets,wehavecontinuedtoprovideaccesstohighlevelsofliquidityacrossourmarkets,introducedleading-edgetradingplatformsandadjustedtariffstoincentivisetrading.Volumeandvalueoftradingforequitiesremainedstableamidstperiodsofvolatilityinthemarkets.FixedIncometradingincreasedsignicantlyasEuropeanGovernmentsissuedarecordamountofbonds,andIDEMderivativesvolumesalsoincreased.

PrimaryMarketsThenumberofnewcompaniesjoiningtheGroupsmarketsincreasedby185duringtheyear(2010:110),bringingthetotalnumberofcompanieslistedoradmittedonourmarketsto2,938.IPOfundraisingrosebymorethan235percent,as99companies(2010:50IPOs)fromacrossthegloberaisedover13.1billion(2010:3.9billion)onourmarkets.Inaddition,27.2billion(2010:72.6billion)wasraisedinsecondaryissues.ThepipelineofIPOsremainsstrong,althoughmarketvolatilitymayaffectthetimingofsomeissues.

Capital Markets

The Groups Capital Markets divisionfacilitates companies raising ofcapital both equity and debt together with the provision of liquidsecondary markets for trading.RaffaeleJerusalmiDirectorofCapitalMarketsandChiefExecutiveOfcerofBorsaItaliana

Strategy: Become a more client-centric business

Promote and extend appeal o ourmarkets to international issuers

Product innovation beyond equities in particular in equity derivatives

and fxed income

Add value through integrated oeringrom listing to cash trading and indices

to derivatives trading

Improve the competitiveness andscale o our cash equities business


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2007

2008

2009

2010

242

290

256

252

Borsa Italiana average daily number of trades000s

2007

2008

2009

2010

6.5

6.9

4.6

9.0

LSE average daily value tradedbn

Governance


Otherinformation

BusinessReview

Overview

17

Forfurtherinformationvisit:www.londonstockexchangegroup.com

BusinessReview CapitalMarkets

Wehavecontinuedextensivemarketingactivityacrosstheglobetocompaniesseekingcapital.AmongthenotablecompaniesjoiningourmarketswereEssarEnergy,InternationalConsolidatedAirlinesGroup,AZElectronicMaterials,EnelGreenPowerandTransContainer.Aswellasthefocusonkeygrowtheconomies,includingRussiaandLatinAmerica,wehavebeenspreadingourfootprintinfrontiermarketssuchasVietnam,IndonesiaandMongolia.InJanuary2011,weformedastrategicpartnershiptorestructureanddeveloptheMongolianStockExchange.InMarchHoangAnhGiaLaiJointStockCompanybecametherstVietnamesecompanylistedontheLondonStockExchange.

TheEuropeanSecuritiesandMarketsAuthority(ESMA)announcedaframeworkinMarch2011whicheasestheprocess

fornon-EUissuerstolistinEurope.Itenablesprospectusesfromnon-EUcountrieswhicharedrawnupincompliancewiththatthirdcountrylegislationtohaveawrapaddedcontainingsupplementarydisclosures.Israeliissuersbecamethersttobenetfromthisnewframework.

SecondaryMarketsEquitytradingOurcashequitiesmarketsaredesignedtomaximisetheliquidityofanindividualsecurityanddeliverefcienttradingpriceformationandexecutionservices,throughrobusttradingsystems,effectiveregulationandahighlevelofpriceandtradetransparency.

ThemostimportantperformancemetricsarevaluetradedintheLondonmarketandvolumetradedintheItalianmarket.Bothhaveremainedstableinthepastyear.InLondon,theaveragedailyvaluetradedwas4.7billion(2010:4.6billion);inItalytheaveragedailynumberoftradeswas257,000(2010:252,000)withvolumespickingupstronglyinQ4.

WetookanumberofstepsinthepastyeartoimprovethecompetitivenessofourcashequitiesmarketintheUK.Suchmeasuresincludedchangestotariffstoincentivisemoretrading,reductionsinposttradecostsbynegotiatingwiththirdpartyproviderstoreducetheirfees,andimprovingclientrelationships.Shareoftradingwasstableoverthecourseoftheyearat63.5percentoftotalUKlitorderbooktradingand84.0percentinItaly.

InFebruary2011,wemigratedourcashequitymarketstotheMillenniumExchangeplatform.Thisnewtechnologyhasmadetradingspeeds10timesfasteranddeliveredsubstantialperformanceimprovementstoclients.Itisnowprovidingthe

Groupwithalowercostbaseandamoreexibleplatform.Separately,thevaluetraded,volumeandnumberofETFsandETCsonourmarketshaveenjoyedstronggrowthoverthepastfewyears.Inaggregatetherewere1,345ETFslistedontheLondonStockExchangeandBorsaItalianaattheyearend,up56percentonthepreviousyear.OurmarketscomprisethelargestETFmarketinEuropeintermsofturnover(tradingvolume).Averagedailyvaluetradedfortheyearreached483million,deliveredthrougha31percentincreaseinaveragetradesadayto18,291.RetaildemandforETFtradingcontinuedtobestrong.

We are a leading global primarymarkets venue for internationalcompanies and the leading venuefor equities trading in Europe.We continue to build on our broad

portfolio of assets including xedincome and derivatives.


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18 BusinessReview


InNovember2010,IDEMmarketsmigratedtotheSOLATradingplatform,atechnologydevelopedbyTMXGroup,increasingtherangeoffunctionalitiesavailableforIDEMmembers.EDXsuccessfullymigratedtotheSOLATradingplatformin2009.

Wehaveannouncedplansforthelaunchofapan-EuropeanderivativestradingservicethroughTurquoise,tocommenceinJune2011.TheservicewillprovidetradinginfuturesandoptionsonkeyindicesandsinglestocksacrossEuropeanmarkets.EDXistobeincorporatedintoTurquoiseDerivatives,

toprovideanefcientLondon-basedservice.

DerivativesIDEMistheGroupsItalianderivativesmarket,composedoftwosegments:IDEMEquities;andIDEXforelectricityfutures.TradingofInternationalOrderBookandNorwegianderivativesisconductedonEDXinLondon.

ItwasarecordyearfortradingonIDEMwithparticularlystrongperformanceintheseasonallybusyQ1period.Thetotalnumberofcontractstradedincreased13percentfromlastyear,reaching46.4million.TradingofItalianelectricityfuturesonIDEXreducedfourpercentatanaverageof59GWhtraded

eachday.ThenumberofcontractstradedonEDXdeclined37percentto35.6million,principallyreectingthelossofScandinavianderivativestradingonEDXattheendof2009.

AIM

Companiesfromaroundtheworld

Accesstoadeeppoolofcapital

ContributiontoUKEconomyin2009*

GrowingAIMItalia

*EconomicImpactofAIMandtheRoleofFiscalIncentivesbyGrantThornton,September2010

1,174companiesand82.0billionaggregatemarketcapitalisation.

459companieshavemajoroperationsoutsidetheUK.

Fromawiderangeof42businesssectors.

62NominatedAdvisers.

MakingtheequityfundingladderworkforUKSMEs:Overthepastfewyears,policymakershaveincreasinglyrecognisedthesignicantpotentialofSMEsasdriversofgrowth,stability,innovationandemployment.WehaveworkedhardattheUKandEuropeanlevelstomakesurethattheregulatoryandtaxenvironmenthelpssupportthesebusinessesthroughouttheirgrowth,fromseedcapitaltoAIMandbeyond.

InpartnershipwithAIMcompaniesandorganisationsrepresentingbothsmallbusinessandtheinvestmentcommunity,wehaveplayedanintegralroleindevelopingtheUKGovernmentsgrowth

agenda.Thisapproachhasbroughtstrongresults,includingimportantpolicymeasuresinthe2011Budgettosupportventurecapitalinvestment.InBrussels,weareworkingcloselywiththeEuropeanCommissionandParliamenttobuildthebestpossibleregulatoryenvironmentforSMEgrowthmarketstoencouragefundraisingwhilemaintaininghighlevelsofinvestorprotection.Morewidely,wecontinuetoactasathoughtleaderontheseissues,hostingorparticipatinginpublicdiscussionwithpolicymakersatthehighestlevels.

1.1billionraisedatadmissioninthepastyear.

6.6billionraisedthroughfurtherissuance.

Valuetraded37.8billionwith4.9milliontrades.

74.5billionraisedsincelaunchin1995.

12billiontoGDP.Supporting250,000

full-timeequivalentjobs.

LaunchedDecember2008.11companiesat31March2011.15NominatedAdvisers.AcquisitionofProMac

(Italianmarketforsmallercompanies)nineItalianSMEsadmitted.

AIM


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Governance


Otherinformation

BusinessReview

Overview

19


BusinessReview CapitalMarkets

Wearealsoexpandingourservicesandproductrange,includingindicesprovisionwhichnowcoverassetsundermanagementofalmost7bn.MTSCredit,apan-EuropeanMultilateralTradingFacility(MTF)willbelaunchedbeforetheendof2011.Itwilloffertradinginmorethan2,400investmentgrade,Euro-denominatedcorporate,nancialandcoveredbonds.

Therewasgoodtradingonourretailbondmarkets.BorsaItalianasMOTserviceattracted4.0milliontradesduringtheyear(2010:3.5million).IntheUKtheOrderbookforRetailBonds(ORB)increasedthenumberofcorporate,Government

andsupranationalbondsto147thatwereavailablefortradingbytheendoftheyear,upfrom73atlaunchinFebruary2010,with23participantsprovidingliquidity.

FixedIncomeMTSprovidesregulatedelectronictradingplatformsforintermediariestradingEuropeanwholesaleGovernmentbondsandothertypesofxedincomesecurities.TradingatthestartoftheyearwasaffectedbytheEurozonesovereigndebtcrisis.However,actionstakenbytheEuropeanCentralBankgavecondencetothemarketswhichhelpedrestorevolumes.Inparticular,averagedailyvolumeinFrance,theNetherlandsandSpainwentup92percent,72percentand17percentrespectively.

MTSnowcovers15marketplacesandcontinuestoexpanditsgeographicscope.WeaimtofacilitatenewmarketsandconsolidateexistingMTSmarkets.

Trading

ActiveretailmarketsinItaly DevelopingretailmarketsintheUK

Access Products CostreductionandMarketing

Retailoffering

LargestretailmarketinEurope,withmorethanonethirdoftotaltrades.

850,000activeprivateterminals.

Nearly4milliontradesand220billiontradedonMOT.

RationaleCapitalmarketsandcoreactivitiesareshowingstrongsignsofrecoveryandgrowth.WeareexportingtheMOTmodelfromItalytotheUKandpromotingourproductstoretailinvestors.

RetailinvestorscanaccessrealtimeItaliandataviaProquoteItaly,ournancialinformationandtradingsystem.

ProquoteMobileenablesaccessviaasmartphoneorothermobiledevice.

DMADirectMarketAccesstoprovideprivateinvestorswithalevel

playingeldwithmarketprofessionals.

ORBOrderBookforRetailBondstradingUKGiltsandCorporates.

ETFsandETCs.Coveredwarrants.

Lowcostaccesstorealtimedata.

Tradingfeepromotionforretailbrokers.

Objectivetoreduceposttradecosts.

Workingwithbrokers/datavendorstotailoreducationtoretailinvestors,includingroadshows.


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007

008

009

010

95

111

103

108

Contracts cleared

2007

2008

2009

2010

2.0

2.6

3.1

4.5

Initial margin heldAverage bn

20 BusinessReview


IntroductionOurPostTradeServicesdivisionprovidesclearing,settlementandcustodyservicesforequity,derivativeandxedincomesecuritiesonmultipleplatformsandforOTCproducts.

Thelast12monthshaveseenunprecedentedfocusontheareaofposttradefrommarketparticipants,industrycommentators,politiciansandpolicymakers.Thisfocusandresultantreformonagloballevelissettoprofoundlychangetheposttradelandscape.Wecontinuetobeattheforefrontofthisreform

toensurethatourmarketsandourcustomersenjoythesafest,mostrobustandcosteffectiveclearing,centralcounterparty,depositoryandassetservicingenvironments.

Wehavemadechangestothemanagementofourbusiness,inparticularwiththeappointmentofPaoloCittadiniasCEOofMonteTitoliaswellasremainingCEOofCC&G.Weareworkingtopromotetheintegrateddevelopmentoftheposttradebusinessesataninternationallevelhelpingtodrivethegrowthanddiversicationofourservices.

ClearingOurclearingservices,providedbyCC&G,guaranteetradesandmanagecounterpartyriskinarangeofassetsandinstrumentsincludingcashequities,derivatives,energyproductsandGovernmentandcorporatebonds.

Wehavedeliveredagoodperformance,with30percentgrowthintotalincome,drivenbyanincreaseincontractscleared,particularlyinIDEMderivativesandMTSxedincometrading.Thesetradescarryhigherinherentriskthanequitytrades,resultinginhighermarginfundsheldovertheyear.

Post Trade Services

Our Post Trade Services divisionprovides a range of risk managementand trade processing services toensure the successful completionof trades and custody of assets.KevinMilne

DirectorofPostTradeServices

Strategy:

Provide capital markets with the mostefcient post trade arrangements

Build the scale o our oeringthroughout the post trade process

Champion greater post tradeefciency and competition in Europe


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2007

2008

2009

2010

2.63

2.79

2.69

2.87

Assets under custody trillion

2007

2008

2009

2010

80.9

74.3

72.0

83.9

Settlement Instructions

m

Governance


Otherinformation

BusinessReview

Overview

21


BusinessReview PostTradeServices

InitialmarginforCC&Gaveraged6.9billiondailyfortheperiod(2010:4.5billion).WemadesignicantinvestmentinourriskandtreasurymanagementfunctionsinCC&G,whichresultedinimprovedreturnsonthecashplacedondeposit.Thegrowthinmarginheldandimprovedrisktreasurymanagementcontributedtoanincreaseinnettreasur yincometo51.3million(2010:16.2million).

Newserviceswereaddedduringtheyear.InOctober2010CC&GintroducedaguaranteeservicefortheNewMIC,theinterbankcollateraliseddepositmarketinItaly,managedbye-MID.TheNewMICwaslaunchedasasuccessortotheoriginalMICproject,whichoperatedwithBancadItaliaasitsguarantor,createdtostimulatetheItalianmarketafter

thenancialcrisisin2008.

InNovember,CC&GextendedtheCCPserviceonMOTandintroducedcorporatebondsasanassetclassserved.Bytheendoftheyear,CC&Gcoveredsevenassetclassesand10markets.EuroTLXwilllaterthisyearusetheCC&GCCPserviceforItalianGovernmentandcorporatebonds.

Bytheyearend,CC&Ghad171members,up22percentfromlastyear,from10countriesaroundEurope.73memberswerefromoutsideItaly,accountingfor68percentofvolumesinderivativesand54percentinequities.

Ournettingservicesprovidescalebenetstocustomersintwoways:asingleriskpositionpermemberattheendofeachday;andasinglesettlementinstructionpersecurityforeachrm.Therstisimportantforclientscapitalmanagement,thesecondfortheirposttradecostspertransaction.Forinstance,wechargeasinglefeeforclearingatrade,includingnettingandsettlement,leadingtolowerposttradecostsforourlargecustomersinItaly.Clearingmemberscanalsobenetfrommarginoffsetbetweendifferentproductstradedondifferentvenues.

IntheUK,wecontinuedtoworkwithclearinghouses,suchasLCH.Clearnet,toreduceclearingtariffsandoverallcostoftradingforourclients.CC&GwillalsoprovideservicestoTurquoiseDerivatives.

SettlementMonteTitoliisourSettlementCompanyandCentralSecuritiesDepository(CSD),withawiderangeofconnectionstoEuropeanmarketsandcentralcounterparties.

Inthepastyear,weprocessedaround70millionsettlementinstructions,adecreaseof17percentonthepreviousyearduetoincreasednettingefciencyinourCCPandlowerOTCactivity.MonteTitolihasahighlyefcientsettlementrateat99.5percentwhilstmaintaininglowcostsforclients.

Wecontinuetoprovideoptionsfortraderoutingtoclients.Ourmulti-purposeroutingengineX-TRMisabletoroutetradestonumerousclearinghousesandsettlemententitiesincludingCC&G,LCH.ClearnetSA,EuroclearBankandClearstreamBankingLuxembourg.WehavestartedtoprovideroutingservicestocashequitytradingonSETS.

CustodyMonteTitoliisoneofthelargestCSDsinEuropeandprovidesassetservicingforawiderangeofnancialinstruments,encompassingGovernmentsecurities,corporatebonds(includingassetbackedsecurities),shares,coveredwarrantsandmutualinvestmentfunds(closed-endfunds,propertyfundsandexchange-tradedfunds).Bytheyearend,assetsundercustodyhadreached3.0trillion,anincreaseofvepercent,partlydrivenbyan

increaseinforeignsecuritiesheld.Assetsheldweremadeupof19percentequities,48percentGovernmentbonds,and33percentcorporatebonds.

Inthecomingyear,weaimtoenhanceourassetservicesbyofferingacashmanagementandsecuritieslendingservice.

InApril,theGroupagreedthedisposalofServizioTitoli,aproviderofshareholdermanagementservicestolistedcompaniesinItaly.RevenueforServizioTitolilastyearwas7.9million.

Clearing, settlement and assetservicing volumes have increaseddue to recovery and growth intrading volumes on our markets.


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22 BusinessReview


IntroductionTheInformationServicesbusinessdeliversrealtimedataandotherInformationproducts(includingreferencedata,indicesanddesktopsolutions),ensuringefcientpricediscoveryandextensivemarketintelligencefortradingparticipantsandinvestors.

Reliableandcomprehensivemarketinformationenablesbusinessestomakesounddecisionsinafast-changingworld.Inthepastyear,wecontinuedtoimproveourinformationofferingtoabroadbaseofinternationalclients.

RealTimeDataTheGroupsRealTimeDatabusinessisaprimaryreferencepointforUKandItaliancashequitiesandotherinstruments,usedbytradingparticipantsandinvestorsatalllevels.

Thenumberofprofessionalusersaccessingrealtimedata,viaourdirectnetworkandalsoviaover200networkserviceprovidersandmarketdatavendorpartners,remainedstableat93,000(2010:93,000)forLondonStockExchangeand139,000(2010:142,000)forBorsaItaliana.Reectingtheevolutioninthewaythatrealtimedataisdistributed,duringtheyearweintroducednewpricingandserviceinitiativesfordirectreportingandnon-displayandotherapplicationusage,updatingforevolveddatausageandreducingcostsforanumberofourclients.

InJuly2010,welaunchedanewposttrademarketdataservicetoprofessionalusers,offeringrealtimeposttrademarketdatafromboththeLondonStockExchangeandBorsaItalianacashmarkets.Theofferinghasbeendesignedtodeveloptheavailabilityofhigh-qualityposttrademarketdatainthemulti-venueMiFIDenvironment,toimprovetransparencyofEuropeantradingdata.Wewerepleasedtoseethatotherexchangeshavefollowedourleadbyprovidingsimilarservices.

OtherInformationWeprovidereferencedataandsoftwaresolutions,helpingclientswitheffectivedatamanagementandstraightthroughprocessing(STP).Inthepastyear,wefurtherdevelopedourservicestoprovideclientswithenhancedsecureandefcientdatamanagementandconnectivitythroughUnaVistaandSEDOL.

UnaVistaistheGroupssecure,hostedplatformforallmatching,validationandreconciliationneeds.UnaVistaoffersarangeofbusinesssolutionswithinthreeareas:PostTradeServices,DataSolutionsandReconciliations(seecasestudyonpage25).OurPostTradetransactionreportingserviceenablescustomerstosendinformationtomultipleregulators,includingtheFSA(UK)andAFM(Netherlands).ThenewlylaunchedPostTradeConrmationPortalandSwapsPortalfurtherstreamlinetheposttradeprocessandreduceriskexposureforourcustomers.

SEDOLisourglobalmulti-assetclassreferencedataservice,providinguniqueidenticationcodesforglobalsecurities.SEDOLcodesareauniquecountrylevelidentierandincludebothlistedandunlistedinstrumentscoveringallassetclasses.TheSEDOLMasterleService(SMF)databaseprovidesclientswithaccess

toqueryreferencedataonover19millioninstruments,upfrom10millionlastyear,sourcedfromover80countriesworldwide.SMFiscurrentlybeingupgradedonUnaVistaDataSolutionstoallowimprovedcustomerinteractionwiththedataaswellastheincorporationofnewdatasets.

Information Services

The Groups Information Servicesdivision provides a diverse rangeof data and tools that enabledecision making and operationalefciencies of our extensive,international client base.DavidLesterDirectorofInformationServices

Strategy:

Deliver inormation services thatimprove the efciency o our industry

Leverage our exible platorm toexpand scale and scope o productoering across the Group

Tailor our oering to meetcustomers needs


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2007

2008

2009

2010

96

112

104

93

LSE professional terminals000s

2007

2008

2009

2010

160

151

142

147

Borsa Italiana professional terminals000s

Governance


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Overview

23


BusinessReview InformationServices

Inadditiontoreferencedataservices,ourdesktopsolutionsprovidefront-endproductsformarketdataaswellasorderandexecutionmanagementsystems,allprovidedthroughProquote,inItalyandtheUK.

Proquoteprovidesnancialservicesrms,listedcompaniesandretailinvestorswithefcientaccesstoastoreofnancialinformationincludingmarketquotes,newsandsecurityproles.InItaly,wereached35,000screensbytheyearend,up1,000onthepreviousyear.IntheUK,thenumberofdesktopuserstaking

realtimedatafromProquotewas4,800.InconnectingbrokerswithRetailServiceProviders(RSPs),Proquoteenjoysaleadingpositionwithanetworkof36RSPs;withorderowviatheRSPnetworkforthefourthquarterincreasingby46percentonthesameperiodfortheprioryeartoover400,000tradesamonth.

RNSisaleadingserviceforrealtimeUKregulatorynewsannouncements.Issuers,includingasignicantproportionofFTSE100companies,chooseRNStomeettheirdisclosureobligationsandcommunicatewithprofessionalinvestorswithatotalof180,000announcementsoverthepastyear.

FTSE,ourjointventurewithTheFinancialTimesLtd,providesnancialindicestointernationalclients.Sinceitsestablishmentin1995,ithassuccessfullydevelopedtheFTSEbrandgloballyandtodaythemajorityofitsrevenuesaregeneratedoutsidethe

UK.Withover$5trillionofassetsestimatedtobebenchmarkedtoFTSEIndicesglobally,itisthethirdlargestindexprovider

TurquoiseDerivatives

IOBEquityDerivativesonRussian,Kazakhstan,Egyptian,SouthKoreanandIndianunderlyings.

FTSERussiaIOBindex.Norwegianstockandindex

optionsandfutures.NewlylaunchedIOB(Russian)

DRDividendFutures.

TurquoiseDerivativesemergingmarketsbookanequityderivativesmarketfocusedonemergingmarketscompaniestradedontheLSEsIOBorderbook.

TurquoiseDerivativeslaunchedMay2011withFTSE100IndexfuturestocommencetradinginJune

2011(subjecttoobtainingrelevantlicences).

SOLATrading,TMXGroupsmarket-leadingultra-low-latencyderivativestradingtechnology.

AlsousedbytheGroupsIDEMderivativesmarket.

CC&Gprovidesriskmanagement,margincalculation,nettingandsettlementprocesses.

ClearinghandledbyLCH.Clearnet.

Existingproducts

(TransferredfromEDX)

Newproducts Technology Clearing

worldwideandservicestheworldslargestassetowners,fundmanagersandinvestmentbanks.FTSErevenuesincreased18percentduringtheyear.

DuringtheyearFTSEacquiredtheoutstandingsharesofFTSE/XinhuaIndex,nowrenamedFTSEChinaIndexseries,whichistheleadingindexseriesdesignedtoenableinternationalinvestmentintheChinamarket.

Turquoise,ourmajorityownedMTFofferingtradinginpan-Europeanequitiesonarangeofmarkets,hassuccessfullygrownitsshareoftrading.Asattheendoftheyear,TurquoisewasthethirdlargestMultilateralTradingFacilityforlitbooktradingwitha3.6percentshareofpan-EuropeansecondarytradingandthesecondlargestMTFmid-point,ordark,marketwitha34percentshareofpan-EuropeanMTFmid-pointtrading.

ThisyearTurquoisesuccessfullycompletedthemigrationofitstradingplatformtotheMillenniumExchangeplatform.Thenewplatformhasincreasedthespeed,capacity,functionalityandscalabilityoftradingandprovidedenhancedaccessforcustomers.

From1April2011,TurquoisewillbereportedaspartofCapitalMarketsfollowingchangestothewaythebusinessismanagedontheincorporationofEDXintoTurquoiseDerivatives.


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6.05.0

3.73.0

1.41

11.0

0 .1 13 0. 101Tradingsysteml

atency(milliseconds)

T

radElect(Jun07)

T

radElect

R

elease2(Oct07)

T

radElect

R

elease3(Sep08)

T

radElect

R

elease4(May09)

T

radElect

R

elease4.1(Jul09)

T

radElect(Mar10)

M

illenniumExchange

LSEequity

M

illenniumExchange

Turquoise

Latencymilliseconds

24 BusinessReview


Technology Services

IntroductionTechnologyServicescomprisestechnologyconnectionsanddatacentreservicesforclientsofLondonStockExchangeandBorsaItaliana,andtheMillenniumITsoftwarebusiness,basedinSriLanka,whichprovidestechnologyfortheGroupaswellastechnologyandenterpriseservicessalestothirdpartiesworldwide.

InOctober2010,wecommencedtherolloutofthenewMillenniumExchangetradingplatformtoourmarkets,

acriticalsteptoincreasingcompetitiveness.Thisnotonlyenablesustobecomethefastesttradingsystemintheworld,butalsogivesusalowercostbaseandmoreexibleplatform.

MillenniumITInthepastyear,wemigratedTurquoiseandtheUKcashequitiesmarketsontotheMillenniumExchangetradingplatform,ahighlyscalable,multi-assetclasstradingplatform,offeringtheGroupsclientssuperiortechnicalperformance,ultralow-latencyandenhancedfunctionality.

TurquoisemigratedtoMillenniumExchangeinOctober2010,deliveringaverageorderentrylatencyoflessthan110microseconds.Additionalfunctionalitywasdesignedtofurtherdifferentiatethemidpoint(dark)bookthroughimprovingthequalityofmidpointmatching.TheUKcashequitymarketsuccessfullymigratedinFebruary2011,withaveragelatencynowbelow125microseconds,morethan10timesfasterthanthepreviousTradElectplatform.Althoughtherewereafewinitialissuesgiventhescaleandspeedoftheproject,feedbackfromclientsonperformancehasbeenverypositive.

NextonouragendaisthemigrationofMTA,ourItaliancashmarket,andtheMOTxedincomemarket.MillenniumITisalsodevelopingaNewClearplatformforourposttradeservices.

Our Groups Technology Servicesdivision optimises speed, performance,security and exibility of trading, andalso sells systems to third parties.TonyWeeresinghe(left)DirectorofGlobalDevelopmentandCEOofMillenniumIT

AntoineShagouryChiefInformationOfcer

Strategy:

Deploy low cost, high performanceand reliable platforms and software

across the Group

Provide specialist capital marketstechnology products to thirdparties worldwide


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Governance


Otherinformation

BusinessReview

Overview

25


BusinessReview TechnologyServices

Duringtheyear,MillenniumITwoncontractstosupplymarketsurveillancesystemstotheEgyptianExchangeandtradingsystemstoTullettPrebon,tofurtherdeveloptheirelectronicbrokingcapabilities.Africaslargestexchange,JohannesburgStockExchangewillalsoswitchtradingplatformsontoMillenniumExchange.LondonStockExchangeGroupandtheMongolianStatePropertyCommitteehavesignedanexclusiveStrategicPartnershipAgreementtorestructureanddeveloptheMongolianStockExchange,whichincludesMillenniumITprovidingtrading,posttradeandsurveillanceinfrastructure.

OtherTechnologyServicesTheGroupoffersasuiteoftechnologyservicesforclientaccessandconnectivitytoavarietyoftradingandrealtimemarketdataservices.

Wehaveseengoodtakeupofourco-locationservice,ExchangeHosting,whichoffersultralowlatencysensitivetradingclientstheabilitytotakespaceinourdatacentre,signicantlyreducingnetworklatencyandprovidinghighperformancetradingaccess.

Wehavedeepenedthescopeofourofferingthisyear,includinganeworderroutingserviceviaanultrafastbre-opticnetwork,allowinghostingclientstorouteorderstoallmajorEuropeanandUSexecutionvenues,directfromourdatacentre.Colt,thetelecomsservicescompany,issoontoprovideaproximityhostingservice,wheretraderscanplacetheirserversinColtsdatacentrewhichisincloseproximityto,andconnectedviabre-opticcableto,ourowndatacentre.

Wealsoopenedourmarkettonon-tradingmarketparticipants,includingvendorsandserviceproviders,whocantaketheirowncabinetswithinthehostingfacility,pavingthewayforthecreationofauniquecommunityofbothtradingrmsandsolutionprovidersinourdatacentre.

Wehavecontinuedtoexpandthescaleofournetworkoffering.Weintroduced1Gband10GbnetworkconnectivitytoourmarketstoprovideclientswithfasteraccesstoGroupdata.

TransactionReporting

ConfirmationPortal

SwapsPortal

Providingadditional

validationaboveandbeyondwhatismandatedbynancialregulators.

Conrmingtrades.Firmscancommunicatesettlementdataforvericationandmatching,reducingtheriskofsettlementfailure.

PartiescankeeptrackofCFDtransactionsandcommunicatethroughUnaVista.

Asuiteofreferenceand

historicaldataproductsdesignedtohelprmscreateagoldencopyofdata.

Functionalitiesincluding

matchingandworkowcapabilitiesmeetdifferentneedsofreconciliation.

DataSolutions Reconciliations

Asatrusted,neutralandregulatedcompany,theLondonStockExchangeisuniquelypositionedtoprovidesolutionsthataddressindustry-widechallenges.UnaVistaisonesuchcriticalcommitmenttotheindustryweserve.Itisatechnologicallyadvanced,hostedplatformwhichoffersourclientsarangeofbusinesssolutionsincludingpost-tradeservices,datasolutionsandreconciliations,andisdesignedtohelpourclientsbusinessesbecomemoreefcientandmoreprotablewhilstreducingtheirriskexposure.

UnaVista

PostTradeServices

Maintaining leading edgetechnology capabilitiescontinues to be a core focus.Technology not only enablesus to become the fastestmarket in the world, but givesus the ability to adapt and

bring efciency to markets.

OtherServices


29/113

628.3 11.6616.7

37.1

21.1 674.9

575

600

625

650

675

700

2010 FXimpact

2010constant

currency*

Acquisitionsin prior year

Organic 2011

Total Income m Increase Decrease

26 BusinessReview


Financial review

Yearended31March

2011 2010 Variance

Varianceat

constant

currency

m m % %

Revenue

CapitalMarkets 281.5 295.3 (5) (3)

PostTradeServices 99.3 100.0 (1) 3

InformationServices 184.7 169.3 9 10

TechnologyServices 48.6 39.4 23 24

Other 1.8 1.6 13 20

Totalrevenue 615.9 605.6 2 4

NettreasuryincomethroughCCPbusiness 51.3 16.2 217 229

Otherincome 7.7 6.5 18 18

TotalIncome 674.9 628.3 7 9

Operatingprotbeforeamortisationofpurchasedintangiblesandnon-recurringitems 341.1 280.3 22 24

Operatingprot 283.0 182.3 55 58

Adjustedbasicearnings

pershare 73.7p60.1p 23

Basicearningspershare 56.4p 33.8p 67

Segmentalreportinghasbeenrestatedtoreectthemanagementorganisationandreportingofthebusinesslinesduringtheyear.TechnologyServicescombinesITServicesandMillenniumIT,reectingthesimilarnatureoftheirproductsandservices.

AsnotedintheBusinessReviewInformationServicessectionofthisAnnualReport,Turquoisewillbereportedas

partofCapitalMarketsfrom1April2011,followingchangestothewaythebusinessismanagedonthemergerofEDXintoTurquoisetoformTurquoiseDerivatives.

The combination o good organicgrowth, successul acquisitionsand continued improvements inoperational efciency resultedin a strong fnancial perormancein the year, with 23 per cent growthin adjusted earnings per share.DougWebbChiefFinancialOfcer

Highlights:

Good growth in Total Income, up seven per centat 674.9 million (2010: 628.3 million); organicgrowth at constant currency was six per cent

Operating expenses before amortisation ofpurchased intangibles and non-recurringitems reduced organically, at constantcurrency, by eight per cent

Adjusted operating prot (before amortisationof purchased intangibles and non-recurringitems) increased 22 per cent to 341.1 million(2010: 280.3 million)

Operating prot rose 55 per cent to283.0 million (2010: 182.3 million)

Adjusted basic earnings per share increased23 per cent to 73.7 pence (2010: 60.1 pence).Basic earnings per share up 67 per cent to56.4 pence (2010: 33.8 pence)

Cash generated from operationsincreased 27 per cent to 381.8 million

(2010: 301.2 million)*Comprises2010TotalIncomerestatedto2011foreignexchangerates


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Governance


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BusinessReview

Overview

27


BusinessReview Financialreview

Thexedincomebusinessperformedstrongly,withvaluetradedinMTSup51percentto68trillionfortheyear.TradingvolumeontheMOTretailbondmarketincreased14percent.

Othercapitalmarketsrevenuesprimarilycomprisefeesformembershipofourmarketsandothernon-tradingrevenues.

PostTradeServices

Yearended31March

2011 2010 Variance

Varianceatconstant

currency

Revenue m m % %

Clearing 35.9 33.4 7 12

Settlement 18.2 21.1 (14) (10)

CustodyandOther 45.2 45.5 (1) 3

Totalrevenue 99.3 100.0 (1) 3

NettreasuryincomethroughCCPbusiness 51.3 16.2 217 229

Totalincome 150.6 116.2 30 35

Equityandderivativesvolumesclearedrosefourand13percentrespectively,contributingtotheincreaseinclearingrevenues.NettreasuryincomethroughtheCentralCounterparty(CCP)businessgrewsignicantlydueto:

53percenthigheraverageinitialmarginheld,mainlydrivenbyincreasedxedincomevolumesthroughtheCCPasaresultofbothhighertradingvolumesandadditionalxedincomemarketsguaranteedbytheCCP;and

signicantinvestmentinourriskandtreasurymanagementfunctionsenablingustoimprovetheratesachievedoninvestmentofmarginfundswithItalianbanks.

TotalIncomefromtheclearingbusinessrose76percentto87.2million.

Thenumberofpre-settlementandsettlementcontractsfell10and22percentrespectivelyfollowingareductioninOTCvolumesandincreasednettingdrivenbyariseinthenumberofmarkets

(suchasMOT)guaranteedbytheCCP.IntheCustodybusiness,thevalueofassetsundermanagementincreasedvepercentto3.0trillion.RevenuesfromServizioTitoliS.p.A.,theshareholderservicesbusiness,declinedslightlyto7.9million.On10May2011,thesaleofServizioTitoliS.p.A.toComputershareplcwascompletedforaconsiderationof32.4million.

CapitalMarkets

Yearended31March

2011 2010 Variance

Varianceat

constant

currency

Revenue m m % %

PrimaryMarkets

Annualfees 37.8 35.2 7 9

Admissionfees 33.0 34.0 (3) (2)

70.8 69.2 2 3

SecondaryMarkets

Cashequities:UK 86.4 101.8 (15) (15)

Cashequities:Italy 30.7 31.7 (3) 1

Derivatives 16.8 19.5 (14) (12)

Fixedincome 32.4 29.3 11 15

166.3 182.3 (9) (7)

Other 44.4 43.8 1 5

Totalrevenue 281.5 295.3 (5) (3)

Annualfeeincomeincreasedsevenpercent,withmarketcapitalisationattheendofNovember2009(whichformedthebasisofUKMainMarketfeesfortheyearended31March2011)up27per

centcomparedwiththeprioryear.Thiswaspartlyoffsetbya14percentreductionversustheprioryearinAIMcompanynumbersasatApril2010(whichformedthebasisofAIMfeesfortheyearended31March2011).InItaly,averagemarketcapitalisationfortheyearended31December2010wasvepercenthigherthanthecorrespondingprioryear(feesaresetonacalendarhalf-yearlybasisbasedonaveragemarketcapitalisationforthepriorsixmonths),whilstcompanynumberswerebroadlystableat296.

Admissionstoourprimarymarketsincreasedduringtheyear,withnewissuesgrowing68percentto185,including50internationalcompanies,andamorethandoublingofnewcompaniesjoining

AIM.Inrevenueterms,theseincreaseswereoffsetbyareductioninfurtherissues,whichlastyearbenetedfromthehighlevelofsecondaryfundraisingascompaniesrepairedtheirbalancesheets

followingthecreditcrisis;moneyraisedfromfurtherissuesdeclined63percentto27.2billionintheyear.

UKequitytradingrevenuesbenetedfromatwopercentincreaseinaveragedailyvaluetradedto4.7billion,whilstouraverageshareofvaluetradedfortheyearwas63.5percentupfrom61.4

percentforthemonthofApril2010.PricingchangesinSeptember2009andthepricingpilotinitiatedinMay2010resultedina17percentreductioninaverageyieldontheSETSorderbookto0.71basispointsanda15percentreductioninrevenue.

Italianequitytradingrevenuesarechargedonthebasisofthevolumeoftradescompleted,whichwasuptwopercentonlastyearatanaverage257,000perday.

DerivativetradingvolumesinIDEMincreased13percentversus2010,partlyoffsettingtheverysharpreductionintradingof

ScandinavianderivativesonEDXfollowingitschangeintradingplatforminDecember2009.RevenuesforQ4wereupvepercentonlastyear.


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349.6 5.8 343.8 19.85.5 24.8 32.2 336.9

250

290

270

310

330

350

370

2010 FX

impact

2010

constant

currency*

One-off

TradElect

write

down

Estimated

inflation

Organic Acquisi-

tions

in prior

year

2011

28 BusinessReview


InformationServices

Yearended31March

2011 2010 Variance

Varianceat

constant

currency

Revenue m m % %

Realtimedata 101.2 103.7 (2) (1)

Otherinformationservices

83.5 65.6 27 28


ProfessionalterminalnumbersreceivingtheGroupsUKrealtimedataat31March2011werelittlechangedovertheyearat93,000.ProfessionalterminalnumberstakingItaliandataweretwopercentlowerat139,000,resultinginasmallconstantcurrencyreductioninrevenue.

Nonrealtimedataproductscontinuedtoperformwell,withgoodresultsacrossanumberofproducts.Inparticular,continuedgrowingcontributionsweregeneratedbySEDOL(whichprovidesuniqueidenticationforarangeofglobaltradablesecurities),UnaVista(aposttradedatamatchingservice),royaltiesfromtheFTSEindicesjointventureandProquote.TheInformationServicesdivisionalsobeneted

fromafullyearrevenuecontributionof10.0million(2010:0.3million)fromTurquoise,whichwasacquiredinFebruary2010.Turquoiserevenuesareshowngrossof5.8millionofmakerrebates,whichareincludedwithincostsofsales.

TechnologyServices

Yearended31March

2011 2010 Variance

Varianceat

constant

currency

Revenue m m % %

MillenniumIT 18.2 6.7 172 168

Technology 30.4 32.7 (7) (6)


TheGroupsTechnologyServicesdivisionreectedafullyearofrevenuesfromMillenniumIT,acquiredinOctober2009.

MillenniumIThasperformedwell,withtheprincipalfocusofactivityondevelopingtechnologyfortheGroup.Intheyearithasalsotakenanumberofthirdpartycustomerslive,includingacommodityexchangeinIndiaandsmartorderroutingtechnologyinCanada,andhasbeenawardedcontractsincludingTullettPrebon,theChittagongStockExchangeandalargeIndianbank.MillenniumITwillalsobeakeypartoftheagreementtorestructureanddeveloptheMongolianStockExchange,withwhomacontractwassignedshortlyaftertheyearend.

TheTechnologyServicesdivisionbenetedfromexpansionofourUKserverco-locationoffering,whichwaslaunched

lastyear,andgrowthinourItalianASPbusiness,duetotheconsolidationofservicesprovidedtoclientsandproductdiversicationtoattractnewcustomers.Thetransferofsupplyofourexternalcommunicationsnetworktoathirdpartyfrom

Ouroperatingexpenses,beforeamortisationofpurchasedintangiblesandnon-recurringitems,werereducedorganicallybyeightpercent,onaconstantcurrencybasis.Thisreects

previouslyannouncedheadcountandpropertyrestructuri

Documents

Lseg Annual Report 2011