The London Stock Exchange said it has entered into exclusive talks with low-cost trading platform Turquoise Trading Ltd., as rising competition forces trading houses to consolidate.

The LSE's new Chief Executive Xavier Rolet has recently said he was looking for growth through acquisitions.

The head of Turquoise -- which was set up by nine investment banks looking to lower the cost of trading last year -- told Reuters in August that it was happy to cede control and that it had hired UBS to seek potential buyers.

Turquoise is backed by Citi, Goldman Sachs, Bank of America Merrill Lynch, Morgan Stanley, UBS, Credit Suisse, Deutsche Bank, BNP Paribas and Societe Generale.

The trading platform, launched in August 2008, is still loss-making, but has about a 7 percent market share.

(Reporting by Daisy Ku)