Liffe still losing ground to rival

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The Independent Online
LIFFE, London's troubled futures and options exchange, is continuing to lose ground to its arch-rival in Germany, according to figures published yesterday.

The London exchange's market share of the prestigious German bond (Bund) future slipped to just 19 per cent last month, with the Deutsche Terminborse (DTB) taking the remaining 81 per cent. Liffe's share was down from around 30 per cent in March and 70 per cent last summer.

The volume of Bund futures traded on Liffe more than halved during April. Liffe traded 1.56 million Bund contracts last month, down from 3.23 million in March.

However, the figures revealed that Liffe continued to dominate trading in the more complex short-term interest rate (Stir) products, with Stir volumes up 58 per cent in the year to date.

An exchange spokesperson attributed Liffe's success with Stir products to the exchange's "open outcry" method of trading. DTB uses an electronic trading system.

The spokesperson said: "The Bund future is a much more simple contract and can be applied to current electronic trading platforms. Stir products are more complex, and there is currently no electronic trading platform that can replicate the trading of these products in the pit."

Liffe's board is due to meet later today to try to hammer out detailed plans for the future of the exchange. Liffe's 215-strong membership has already endorsed plans to cut the size of the board and introduce a full- time chairman, in an attempt to streamline decision-making.

On 21 May, members will vote on plans to introduce a state-of-the-art electronic trading system as well as proposals for ownership reform. At today's meeting, the board is expected to discuss detailed reforms of the share structure as well as the contentious proposal to sever the link between share ownership and trading permits.