LIFFE cuts 600 jobs to stem drift of business

LIFFE, the London International Futures and Options Exchange is to lay off 60 per cent of its 1000 staff in a radical bid to halve its cost base and regain its position as Europe's premier derivatives exchange.

Chairman Brian Williamson has set the exchange the target of more than halving costs from pounds 138m to pounds 60m by the end of next year. The moves are in response to the loss to Frankfurt of business in the all-important German bund contract which has sparked concern about the ability of London to remain competitive, particulary as exchanges like Frankfurt and Zurich join forces in preparation for the introduction of the Euro next year.

Mr Williamson said yesterday that having decided on a course of action to win back the support of members, he was now ready to embark seriously on attempts to forge partnerships with other exchanges abroad.

Mr Williamson said that Frankfurt and Chicago would inevitably be on the list of exchanges with which Liffe would wish to deal, as would the London Clearing House. Mr Williamson said he was at one with David Hardy at LCH on the need to offer seamless clearing services, but insisted that although a full-blown merger was an option it was not necessarily the best way to achieve this.

LIFFE, he said, had had a large number of approaches from other exchanges wishing to ally with it, but had felt that it needed to get its own house in order before it could enter into meaningful discussions.

However, he insisted that any moves would have to be driven by the needs of customers not those of the exchange. He pointed to the case of Chicago which had so lost the confidence of members that some had started looking into setting up their own rival market. London, he pointed out, still turned over pounds 264bn worth of contracts each day.

"We have to deliver an efficient trading platform together with the products that our customers want at a price they are prepared to pay," Mr Williamson said.

"It is clear that nothing remotely like our current cost base is sustainable and that we shall have to cut costs to remain competitive," he added.

After consulting with the exchange's members, and its own internal committee, known as the Fast Progress Group, the Board, he said, had decided to focus on three priorities: finances, regulation and new partnerships.

A key part of the strategy unveiled yesterday will be to cut a swathe through the regulatory rulebook in an attempt to counter widespread criticism in the City that LIFFE's belt-and- braces approach to regulation was inappropriate for a market which deals exclusively in products aimed at a sophisticated wholesale market.

"It is the user that will call the shots," he says.

LIFFE will also speed up the move from open outcry to screen-based trade and step up efforts to overhaul its technology to cope with increasingly sophisticated demands.

Mr Williamson said the existing rulebook which was largely inherited from the outmoded Chicago model is based around the pit and no longer appriopriate in a screen-based market.

LIFFE yesterday refused to be drawn on where precisely the jos cuts would fall. However, at least 350 of the staff currently working at LIFFE are IT specialists working on a contract basis on specific projects like the LIFFE Connect electronic trading platform which is to be rolled out later this month.

The phasing out of pit trading will inevitably mean that the 100 or so staff responsible for supervising trade at the 10 futures pits at LIFFE in Cannon Bridge, London will no longer be needed. Simplifying the rulebook would also reduce the need for the current levels of staffing in the supervisory and investigation departments to be retained.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Financial Controller

£45 - £55k DOE: Guru Careers: A Financial Controller is required to join a suc...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£12500 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Recruitment Genius: Sales Adviser - OTE £24,500

£22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...

Recruitment Genius: Business Development Executive / Sales - OTE £40,000

£18000 - £40000 per annum: Recruitment Genius: This fast growing Insurance Bro...

Day In a Page

Mullah Omar, creator of the Taliban, is dead... for the fourth time

Mullah Omar, creator of the Taliban, is dead... for the fourth time

I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

Margaret Attwood on climate change

The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

New Dr Seuss manuscript discovered

What Pet Should I Get? goes on sale this week
Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

The cartoon hedgehog leading the way into a whole new reality

Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
Ants have unique ability to switch between individual and collective action, says study

Secrets of ants' teamwork revealed

The insects have an almost unique ability to switch between individual and collective action
Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

Donovan marks his 50th year in folk

The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
Twitter accused of 'Facebookisation' over plans to overhaul reverse-chronological timeline

Twitter accused of 'Facebookisation'

Facebook exasperates its users by deciding which posts they can and can’t see. So why has Twitter announced plans to do the same?
Jane Birkin asks Hermès to rename bag - but what else could the fashion house call it?

Jane Birkin asks Hermès to rename bag

The star was shocked by a Peta investigation into the exotic skins trade
10 best waterproof mascaras

Whatever the weather: 10 best waterproof mascaras

We found lash-enhancing beauties that won’t budge no matter what you throw at them
Diego Costa biography: Chelsea striker's route to the top - from those who shared his journey

Diego Costa: I go to war. You come with me...

Chelsea's rampaging striker had to fight his way from a poor city in Brazil to life at the top of the Premier League. A new book speaks to those who shared his journey
Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

Our choice is years of Tory rule under Corbyn or a return to a Labour government

Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'
Singapore's domestic workers routinely exploited and often abused in the service of rich nationals

Singapore's hidden secret of domestic worker abuse

David Cameron was shown the country's shiniest veneer on his tour. What he didn't see was the army of foreign women who are routinely exploited and often abused in the service of rich nationals
Showdown by Shirley Jackson: A previously unpublished short story from the queen of American Gothic

Showdown, by Shirley Jackson

A previously unpublished short story from the queen of American Gothic
10 best DSLRs

Be sharp! 10 best DSLRs

Up your photography game with a versatile, powerful machine