Liffe pulls out of Globex talks: Exchange favours own agreements

THE London International Financial Futures Exchange, has decided not to join Globex, the troubled after- hours electronic futures trading system, saying it would prefer to expand through bilateral links such as an expected deal with the Tokyo futures exchange.

The news hit Reuters, one of three backers of Globex. Its shares fell 7p to 485p after touching 481p. The biggest futures exchange in the world, the Chicago Board of Trade, another backer, pulled out of the system last month.

The third founder, Chicago Mercantile Exchange (CME), is still backing Globex. The French futures exchange, Matif, is the only exchange to have joined since the launch.

There may be better news for Globex on Friday when it is expected to announce that DTB, the German futures exchange, has signed up.

Daniel Hodson, Liffe's chief executive, said that the main reason for ending the talks was that conditions of membership would prevent the London centre from linking with other exchanges.

Talks between Liffe and the Tokyo International Financial Futures Exchange, are at an advanced stage, said Mr Hodson. If successful, Liffe will be able to trade the lucrative Euroyen contract. Other links with Asian exchanges are also possible, he said.

Mr Hodson said that evidence of after-hours trading showed that early expectations of pent-up demand for the service were unfounded. About 80 per cent of Globex's turnover is accounted for by Matif.

Liffe is open between 7.30am and 4.30pm, covering most of US trading. Its after- hours system, APT, already allowing business until 6pm, could be extended.

Liffe would not accept Globex's condition that the exchange would have to drop development of APT.

Liffe, which does 70 per cent of German bund futures trades, was also unhappy that Globex failed to specify who would handle the contract.