Liffe Joins Forces with CME
The London International Financial Futures and Options Exchange has finally joined the community of futures markets that have formed technology alliances. Liffe, which previously made a couple of failed attempts to form a technology union with the Chicago Board of Trade, last week signed a strategic partnership with the Chicago Mercantile Exchange (CME). Most significantly, the deal calls for the exchanges to build an interface between Liffe Connect and Globex2, the electronic trading platforms of the Liffe and the CME, respectively.
By building a link between Liffe Connect and Globex2, the Liffe and CME will enable their members to use a single terminal to execute transactions for the exchanges’ full complement of electronically traded products. The interface, which is scheduled to be completed by the first quarter of 2000, also will put an end to Liffe’s trading technology isolation.
Through an in-house-built application programming interface to the internally developed Liffe Connect, Liffe has supplied its members with a multitude of front-end software options for accessing its trading platform. But Liffe had resisted building a direct interface to another major futures exchange–until now.
Just as significantly, the partnership further clarifies the warring camps in the battle for worldwide futures markets supremacy. Prior to its deal with Liffe, the CME’s main futures ally was Matif SA, the French derivatives market. Together, the CME and Matif have also lured some smaller markets–including the Italian and Spanish futures exchange–into their so-called Globex Alliance.
On the other side of the fence sits the Chicago Board of Trade and Eurex, the world’s two largest futures exchanges. Recently, those markets agreed to a technology alliance that calls for the CBOT to abandon its Project A system in favor of a Eurex-supplied trading engine and API by next summer. What’s more, the CBOT had evaluated partnerships with the CME and Liffe before settling on a deal with Eurex.
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