Liffe plans new links with CBoT

THE LONDON futures and options exchange, Liffe, is hoping to develop new trading links with the Chicago Board of Trade, the world's largest futures exchange, writes Peter Rodgers.

Liffe said yesterday it had begun a technical study with the CBoT of how to link the two exchanges' automated after-hours trading systems - called automated pit trading at Liffe and the Project A system in Chicago.

This would allow traders in London and Chicago to access the other exchange on their own screens. The objective is to expand the use of Liffe contracts in the US and of Chicago contracts in Europe, outside normal trading hours.

Daniel Hodson, Liffe chief executive, said the initiative was part of a strategic plan to sell more products through bilateral links with other exchanges in different time zones. He added that Liffe and CBoT had always had an amicable relationship.

If the technical feasibility study and trials are successful, the exchanges will consult their members. The key problem is analysing the legal issues involved in trading on each exchanges.

CBoT said each exchange would keep control of the market in its own futures and options contracts, which would still be cleared by the respective London and Chicago clearing houses.