A new lease of life for outcry

Trading move: Liffe takes space in the Stock Exchange tower
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The Independent Online

Financial Editor

Open outcry could return to the London Stock Exchange's old trading floor, which has been leased by Liffe, the futures exchange. In one of the largest City lettings in recent months, Liffe has taken 75,000 sq ft in the Stock Exchange tower, including office and storage space and the old trading floor.

Liffe, which operates by open outcry and has seen its business expand dramatically in recent years, said it needed the Stock Exchange floor as a contingency reserve. "We have to be able to continue trading at all times. If anything happened, such as a fire, we could not rely on our automated system, but would need to carry on open outcry in another space," a Liffe spokeswoman said.

The Stock Exchange ended open outcry on its own floor when it moved to electronic dealing at Big Bang. Open outcry trading carried on with the options market until it merged with Liffe in 1992.

The trading floor at the Stock Exchange is still occupied by technicians finalising arrangements for the completion next year of the Sequence trading system.

Michael Lawrence, chief executive of the exchange, said: "Our space needs will be changing during 1996, following completion of the systems devel- opment projects on which we have been engaged. Letting these areas is part of the sound management of the exchange's assets."

The exchange is also expected to cut about 300 jobs out of its total staff of 1,300 as a result of replacement next summer of its traditional Talisman settlements system by the new Crest paperless technology.

Liffe expects to take occupation in the second half of next year, and the leases run until 2004. Liffe's principal trading will remain based at its Cannon Street headquarters. But the recent expansion of the trading facilities to meet demand has pushed out office space, which the exchange wants to relocate to the Stock Exchange tower.

Volumes on Liffe have grown since its start-up in 1982 at an annual rate of 50 per cent until this year which has seen a 12 per cent drop, which the market explained by less volatility in bond markets, and a reaction to the Barings crisis and other derivative concerns. But Liffe has recently announced links with the Tokyo and Chicago futures exchange which will bring new contracts to the floor.