Outlook: Liffe will have to change quickly
Thursday 09 April 1998
Thus the Stock Exchange had to be forced by the government of the day into abolition of fixed commissions and dual capacity. Later, order-driven trading had to be bulldozed through the powerful vested interests that stood in its path. Much the same is true of the City's other leading markets.
The London International Financial Futures and Options Exchange (Liffe) seems to be another case in point. This has been an undeniably successful market since it was established some 15 years ago, and it continues to grow like Topsy. Just recently, however, it has been overtaken by the Deutsche Terminborse in Frankfurt on the key bund futures contract. While this is only one of a large number of futures contracts, many of which are still overwhelming dominated by Liffe, it is the most widely traded in Europe and it could be a harbinger of things to come.
Liffe has not only been slow to respond to this competitive challenge; for a long time it positively resisted the screen-based trading systems that would enable an adequate response. The reasons for this are many and varied but the most important is that the market is mutually owned by its members. Many of these are so called "locals", individual freelance traders with a big vested interest in the present, open outcry method of trading. Their livelihoods and jobs depend on it, and as a result they have been behaving like modern luddites.
The necessary screen-based, open-access systems will probably be voted through at next month's extraordinary meeting, but it has taken a wave of adverse publicity, the resignation of a board member and a serious thrashing by the Germans to make it happen.
It is vital, then, that the exchange moves swiftly to deal with the nub of the problem - slow, too little too late, decision making caused by mutual ownership. Separation of ownership from membership through a stock market flotation should be put forward not just as an option at next month's meeting, but posed as a vital necessity. Liffe has become too important a market to be held back by vested interest.
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 2 Dog thinks owner is drowning in lake, dives in and tries to pull him out
- 4 Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Greece elections: Greek PM Alexis Tsipras takes aim at 'neo-liberal' Europe as country gears up for prolonged austerity battle
Pornhub star Mia Khalifa receives death threats after being ranked the site's top adult actress
Prince Philip set to be knighted by Australia: Celebrate by reading his greatest gaffes
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
Leaked documents show Ukip leaders approve NHS privatisation once it becomes more 'acceptable to the electorate'
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...