CME, LIFFE Announce Implementation Dates For Partnership Initiatives

The Chicago Mercantile Exchange (CME) and the London International Financial Futures and Options Exchange (LIFFE) today announced a launch date of March 20 for the delivery of the first initiatives under the banner of their strategic partnership announced last summer. In the first phase, the exchanges will offer cross-exchange product access, allowing CME traders using GLOBEX®2 workstations in Chicago to trade all LIFFE CONNECT™ for futures products and LIFFE members in London to trade the CME's electronically traded products through the LIFFE CONNECT™ network. The products to which LIFFE members will gain access include the CME's flagship Eurodollar contracts, the world's most actively traded short-term interest rate futures, as well as the CME's benchmark S&P 500® Stock Index and Nasdaq 100 Index® products. Similarly, CME members will gain access to LIFFE's Euribor futures, the world's most liquid euro-denominated short-term interest rate futures with over 95 percent market share, and other LIFFE products, including Short Sterling futures and FTSE100 Index futures. Furthermore, LIFFE and CME members will be able to cross-margin their positions on the two exchanges, gaining the advantages of the capital and cost savings that margin offsets provide. This feature is expected to go live on March 31, subject to legal and regulatory clearance. The margin offsets, of up to 60 percent on the CME's Eurodollar and LIFFE's Euribor and Euro LIBOR positions, will be provided by the CME Clearing House Division and the London Clearing House (LCH). "With cross-exchange access and cross-margining, customers and members of the CME and LIFFE will gain the advantage of single-screen trading and cost efficiencies for products of the world's leading financial exchanges in short-term interest rates," CME Chairman Scott Gordon said. Hugh Freedberg, LIFFE's Chief Executive said: "We are delighted to be delivering real benefits to our customers in a matter of months after signing the CME/LIFFE strategic partnership." CME President and Chief Executive Officer Jim McNulty said, "Distribution is of paramount importance in the new e-commerce world marketplace. This alliance allows each exchange to build on the other's established and growing distribution channels." LIFFE and the CME are also continuing to pursue opportunities through the for-profit joint venture announced last year to develop new products and services for the marketplace. The two exchanges have decided to defer proceeding at this time with development of the cross-exchange spread trading facility after initial research determined that customers soon may be able to achieve virtually the same result through a combination of cross-exchange access and increased functionality provided by independent software vendors.