LIFFE To List Global Eurodollar Contract From 18 March

The London International Financial Futures and Options Exchange (LIFFE), wholly owned by Euronext N.V, today announced it will offer three-month Eurodollar futures and options contracts beginning 18 March, 2004. This is a natural extension of LIFFE's short-term interest (STIR) contract franchise which already comprises LIFFE's successful euro-denominated short-term interest rate contract, EURIBOR and its Sterling, Swiss Franc and Yen STIRS, which trade over a million contracts a day. LIFFE CONNECT®, the most advanced and widely distributed electronic derivatives trading system in the world, will be the electronic platform for trading the Eurodollar futures and options.

LIFFE -- a UK-regulated exchange operating under the jurisdiction of the UK's Financial Services Authority (FSA) -- is launching this initiative to meet the demand of its customers worldwide to trade EURIBOR and Eurodollar contracts side by side on the same electronic platform. This will enable the global community of interest-rate customers to gain the benefits of using LIFFE CONNECT®'s technology and distribution and of having all the short-term interest rate contracts cleared together by LCH.Clearnet, Europe's leading central counterparty, whose recent merger has resulted in ownership by a wider user group. Hugh Freedberg, LIFFE's CEO, said: "Today's announcement means we can now offer our customers a single, global market for the world's five major STIR contracts. Customers have been looking forward to the time when they can trade, clear, settle and cross margin all the major STIR contracts on the same electronic market. We will now meet that need."

Last year, trading volume in LIFFE's EURIBOR contracts grew by 43% while trading volume in Eurodollar contracts only grew by 0.5%, emphasizing the degree to which the LIFFE CONNECT® electronic platform, with its extensive distribution in Europe, the United States and the Far East promotes trading growth.

The LIFFE Eurodollar market will be:

A single, global marketplace -- in excess of ten thousand traders from over 650 sites around the world access the system every day;
Immediate and direct -- with all users having access to the same information at the same time;
Efficient -- allowing a trader not only to trade complex short-term interest rate strategies, but also to be active in many more delivery months and strategies than traditional floor-based trading allows;
Cost-effective -- avoiding many of the peripheral costs associated with traditional floor trading, while offering competitive exchange fees for trading Eurodollar contracts;
Capital efficient -- with the opportunity to reduce margin costs through cross-margining between Eurodollar, EURIBOR and other STIR positions;
Proven -- with the LIFFE CONNECT® trading system that is already host to EURIBOR, the largest electronically-traded STIR contract in the world;
Well-regulated -- with strong investor protection rules and regulations, overseen by the FSA, and supported by LCH.Clearnet, Europe's leading central counterparty; and
Widely beneficial -- not just to traders, but to end-users such as corporate treasurers and the wider economy.

As a further potential development, LIFFE recognizes that U.S. customers may wish to trade Eurodollar contracts on a wholly electronic U.S. exchange, using LIFFE CONNECT®, gaining benefits that include clearing in the U.S. In the coming months, LIFFE, working in partnership with its U.S. exchange, NQLX, will explore whether there is sufficient customer demand for these contracts to be made available through NQLX, subject to the approval of the Commodity Futures Trading Commission (CFTC).

Click here for summary contract specifications for the Three Month Eurodollar Future and the Option on Three Month Eurodollar Future.