Liffe would offer the LSE its trading system if iX collapses

Liffe, the London futures market, is willing to offer its electronic trading system to the London Stock Exchange should the LSE's controversial merger with Germany's Deutsche Börse fall through.

Liffe, the London futures market, is willing to offer its electronic trading system to the London Stock Exchange should the LSE's controversial merger with Germany's Deutsche Börse fall through.

Liffe claims it would seek this kind of technological alliance in preference to a full merger. However, Liffe said yesterday that it would not rule out an alternative deal if the LSE's plan to create the new iX exchange is voted down by City shareholders next month.

"We have a responsibility to our members to look at all possibilities," said Liffe. "If it [iX] failed, Liffe could provide [the London Stock Exchange] with technology. We would prefer that to any sort of merger."

Liffe has spent millions developing Liffe Connect, which is gradually replacing its traditional trading floors. It is seen as a much faster, more efficient system, though Liffe had to close it for 40 minutes this month after a computer crash. Liffe has recorded losses for two years due to the cost of running its new electronic system in tandem with its trading floors as Liffe Connect has bedded in.

However, yesterday Liffe reported a return to profit in the six months to June, with profits of £11.2m compared to a loss of £8.3m in the first half last year. Operating profits were £2.5m, with transactional fee income up by 10 per cent. An additional £6.5m came from letting surplus property, chiefly two floors of the London Stock Exchange building in the City as well as a contingency trading floor that has been let to a US firm.

All Liffe's operations have now been relocated to the Cannon Bridge building in the City, with the old trading floor gradually being converted into offices.

Shareholders in the London Stock Exchange are due to vote on the merger with Deutsche Börse on 14 September amid mounting opposition to the deal. A delegation from Apcims, the stockbrokers' trade body, is due to meet Weiner Seifert, the head of Deutsche Börse, in Frankfurt tomorrow.