Liffe, the London International Financial Futures and Options Exchange, will begin trading futures contracts on 15 individual international equities, the Liffe 15, at the end of January 2001. “We have selected global blue-chip stocks from the five most heavily capitalised and actively traded industry sectors,” says chief executive Hugh Freedburg.
Liffe will next year add to the 15 but, as of January, US futures up for trading include AT&T, Cisco, Citigroup, Exxon Mobil and Merck & Co. As with the US futures, the European equivalent – Alcatel, Deutsche Bank and Telecom, Nokia and Royal Dutch – will trade at 100 shares per future. AstraZeneca, BP Amoco, Glaxo Wellcome, HSBC and Vodafone will trade at 1,000 per future. Investors can access via LIFFE CONNECT and clearing and settlement, which is cash only, is through a unified system.
The move has produced an angry response from the Chicago Mercantile Exchange. A formal statement released by the exchange and the Chicago Board of Trade says the announcement demonstrates the unfair competition it faces. “Liffe will trade in four months a product we are banned by federal statute from trading. For 18 years we have asked to have that ban lifted but at every turn we have met delay. Those delays have only worked to the advantage of our foreign competitors.
“Now Liffe and like-minded foreign exchanges have free rein to establish liquidity in these important products and to cater to the global investors who are the customers of US markets. Once these foreign exchanges establish thriving markets in these products, it will be too late to recapture this business.”

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