LSE gained market share in system failure -TR data

* Overall trading volumes rose slightly on Thursday -data

* Big volume drop in Retail Services Providers network

* Chi-X, BATS seen positioned to gain in long run

By Jane Baird

LONDON, Nov 27 (Reuters) - Rival operators failed to benefit from Thursday's system failure at the London Stock Exchange (LSE.L), which gained market share despite halting trading for several hours due to technical glitches, Thomson Reuters data showed.

The LSE's market share rose by more than 5 percentage points to 62.85 percent of FTSE 100 stocks on Thursday, a day that it put all order-driven securities into an auction call period from just after 1030 GMT to 1400 GMT. [ID:nGEE5AP19I]

A system failure at the exchange theoretically could drive customers to trade at its major rivals, multilateral trading facilities (MTFs) such as Chi-X and BATS.

But market players cited a combination of brokers' inadequate routing systems and the LSE's move to auction status to explain why that did not happen.