Liffe terminals get US green light

Liffe (the London International Financial Futures and Options Exchange), has been given the green light to distribute terminals for its LiffeConnect electronic trading system in the US. The move is thought to have prevented a possible trade war between the US and European Union (EU) governments.

Until last week, the US Commodity Futures Trading Commission (CFTC) had closed the door to non-US exchanges - a decision which Liffe chairman, Brian Williamson, said was discriminatory, since the Swiss-German Eurex exchange had been allowed to maintain its US presence.

The about-turn in the CFTC position followed the resignation of chairwoman, Brooksley Born, last Tuesday, and pressure from US financial institutions and traders eager to gain remote access to the largest London derivatives market.

Thomas Theys, MD of PAT Systems, which provides PC-based share trading software, said that before the CFTC about-turn, there had been industry talk about the EU taking retaliatory action.

Theys said: "If the Americans are going to stop foreign terminals from Europe, why would the Europeans allow US terminals in Europe?" he asked. "Given that we're talking about the financing of government debt here, this is all about politics and macro-economics, and sanctions would have been possible."

The Chicago Mercantile Exchange (CME) was quick to protest the CFTC's change of position. It noted the CFTC's stated commitment to "address the comparative regulatory levels between US and foreign electronic trading systems so as not to provide one with a competitive advantage".

A Liffe spokeswoman commended the CFTC's decision. She said the exchange hopes to have a US service up and running by the end of the year.