THE London Stock Exchange (LSE) adopted emergency measures on trading after explosions across London triggered stock sell-offs yesterday.

The Exchange took the unusual step of declaring a “fast market”, designed to ensure the continuation of orderly trading, because of “large market movements and heavy volumes”.

However, the London markets generally coped well with the situation. City institutions also insisted that it was “business as usual”, as they invoked emergency protection plans drawn up in the immediate aftermath of the terrorist attacks in the United States on September 11, 2001.

A “fast market” relieves market-makers in small and medium-sized stocks on SETSmm, the electronic order book, and SEAQ, the computerised automated quotation system, of some of their obligations, such as having to offer firm two-way prices. Meanwhile, limits are put on algorithmic, or automatic, trading by the larger firms.

Two London institutions, the London Metal Exchange and LCH.Clearnet, the body that provides clearing services, found themselves within the exclusion zone around the Aldgate blast but were able to continue to operate.

“The London market remains open for business and the exchange’s trading systems remain fully operational,” the LSE said in a statement.

Banks and brokers contacted by The Times said that staff had been delayed on their journeys into work because of transport chaos but that trading had continued as usual.

Most of the big banks located in Canary Wharf, in London’s East End, and in the Square Mile employ highly trained security staff, who have worked with the Metropolitan Police since the September 11 attacks to ensure staff safety and continuance of operations in the event of a terrorist attack on London.

UBS said that it had been forced to evacuate its office at 100 Liverpool St because of its proximity to one of the Tube stations affected by the blasts. A spokeswoman for UBS said that she could not confirm the number of staff based in that office or whether there had been any casualties. However, the bank’s four other offices remained open yesterday with all trading activities up and running.

LCH.Clearnet, which includes the London institution formerly known as the London Clearing House, was forced to evacuate its Aldgate headquarters and relocate key staff to its planned back-up recovery site. “Clearing services are functioning as normal,” it reported.

The London Metal Exchange in Leadenhall Street suspended face-to-face dealing on its trading floor there because a number of dealers had failed to make it into work. “We’ve been advised to stay in and Leadenhall Street has been closed,” one worker said. Trading continued on the LME Select electronic trading platform. “Volume is slightly up but I think people are only doing what they have to,” a spokesman said.

The terrorist attacks did disrupt the talks on whether Baugur would be thrown out of consortium bidding for Somerfield. Baugur is expected to withdraw from the bid after fraud charges were filed against its chief executive and five others.

Some banks advised all staff who were able to work from home using their laptops to do so today as it appeared that transport in and out of the City would continue to be severely disrupted.

CSFB said it was offering contingency transport services, including buses and boats from Canary Wharf, to ensure that all its staff got home. HSBC, also located in Canary Wharf, had stepped up security at its global headquarters after its premises were bombed in Istanbul in Turkey.

Hotels, taxis and coach firms were rapidly booked up as businesses in Central London tried to find those staff unable to travel home a place to stay and sought alternative transport for those reliant on the London Underground network.

Euronext.liffe, the London financial futures market, and the London database operated by Deutsche Börse, which connects brokers and banks with its Xetra share trading platform and derivatives exchange Eurex, said that they were operating normally.

“We have frequently tested business continuity arrangements and we can seamlessly put these into operation if required,” Euronext.liffe said. “The market is operating as normal and we are operationally unaffected.”

At the International Petroleum Exchange, close to Tower Hill, trading was continuing “as normally as [it] can under the circumstances”. Dealing was “extremely volatile”, given the sharp gyrations on world oil markets. “We’re ensuring all our staff are on site to supervise the market,” the IPE said.

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