London International Financial Futures Exchange (LIFFE) officially opened in September, 1982, which is the earliest and most active financial futures exchange in Europe. Although the establishment of the exchange is ten years later than the earliest financial trading market in the United States, it is still of great significance to maintain London's position as a traditional financial center. Currency futures traded on this exchange include sterling, Swiss franc, German mark and Japanese yen futures settled in US dollars, and US dollar futures settled in German marks. Interest rate futures include various British government bond futures, American long-term government bond futures, Japanese long-term government bond futures, three-month European dollar time deposit futures and three-month pound interest rate futures. Stock index futures include Financial Times 100 stock index futures. In addition, the settlement of this exchange is different from the international money market, and it relies on an independent settlement company-International Commodity Settlement Company (ICCH). As an independent professional settlement company, the International Commodity Clearing Company has no administrative affiliation with the London International Financial Futures Exchange and is only responsible for the daily settlement of the exchange.
1982 On September 30th, stimulated by the prosperity of American financial futures market, Britain also established a financial futures market in London, namely the London International Financial Futures Exchange. The London International Financial Futures Exchange is located in the Royal Exchange Building in London's financial district, adjacent to the Bank of England. The main business types are local financial futures, such as long-term government bonds and sterling interest rate futures. However, in order to become an international futures exchange, the London International Financial Futures Exchange has gradually established contacts with markets such as the United States and Japan, and opened US Treasury bonds and Japanese government bonds. The London International Financial Futures Exchange trades three-month sterling time deposits, long-term sterling government bonds, interest rate futures of three-month Eurodollar deposits, and foreign exchange futures of sterling, Swiss francs, German marks and Japanese yen.
Compared with the United States, LIFFE in Britain is not established according to actual needs, but artificially. The rapid development of American financial futures market has aroused people's concern about the future prospect of London as a world financial center. Therefore, the major commodity brokers, commercial banks, foreign exchange brokers and securities companies in London unanimously requested the Bank of England to set up a financial futures market. At first, the Bank of England held a negative attitude. Later, considering the establishment of financial futures markets outside the United States and the large amount of funds flowing to the United States, it was finally decided to establish the London international financial futures market. Its characteristic is that there are fewer individual investors among market participants, so the purpose of trading is mainly hedging rather than speculation. This is mainly because of the personal income tax in Britain, that is, if the profit of a futures transaction exceeds 6,250 pounds, the excess will be subject to 15% investment tax.
At the beginning of the establishment of 1982, its trading contract was limited to financial futures, and 1985 introduced futures trading. Since its establishment, the types of trading contracts have been expanding, from the initial seven to 2 1 at the end of 0988 (including metal futures and options trading). At the same time, the transaction volume has also increased rapidly. In the first year of operation, the daily trading volume of the exchange was about 6500 lots. In May of 1984, the average daily turnover began to exceed 10000 lots, and in June of 1987 it reached more than 70000 lots. With the increase in the types of trading contracts and the significant increase in trading volume, London international financial futures have attracted more and more attention in the international financial market.
London International Financial Futures Exchange is an exchange established and registered according to 1986 Financial Services Law, and the organizational form of the exchange adopts membership system. By the end of 1987, * * had 26 1 members. Members include banks, stock and commodity brokers, dealers, discount companies, Eurobonds and individual members.
The board of directors is the highest management body, and the directors are elected by members. A newly applied member must be approved by the board of directors to become a full member. There are 373 seats in the exchange hall, and only exchange members have the right to have seats in the exchange hall. The London International Financial Futures Exchange stipulates that all transactions must be conducted on the floor. There are two kinds of members of the exchange, one is the floor trader who trades for himself or the company, and the other is the floor broker who trades exclusively for the OTC broker.
Transaction settlement is the responsibility of the international commodity clearing house. The clearing house adopts the membership system. Usually, clearing house members are also exchange members, but exchange members are not necessarily clearing members. In the latter case, members of the clearing house shall be entrusted to handle the settlement work.
The London International Financial Futures Exchange trades by open outcry, that is, the members of the exchange gather in the trading hall, and the party who takes the initiative to buy or sell publicly indicates the contract, price and quantity to be bought or sold, and then trades with the consent of any trader on the floor. The transaction must be conducted in the lobby. The trading hall is divided into two parts. One is the trading pool, which is located in the center of the trading hall. Only traders recognized by the exchange can trade in the trading pool. The other part is the seat, which surrounds the exchange. Each seat is equipped with telephone, information screen and other communication equipment, and each exchange member has at least one seat for trading. When doing financial futures trading, ordinary customers need to open an account with members of the exchange and entrust members to buy and sell. After accepting the entrustment, the member shall immediately notify the local on-site personnel by direct dial telephone. According to the distance from the trading pool, the floor staff verbally or gestures to inform their traders to trade in the trading pool. After the transaction, the trader will also notify the floor staff verbally or by gesture, and then tell his office to confirm with the customer.