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.
Now LIFFE handles three-month sterling time deposits, sterling long-term government bonds, three-month US dollar deposit interest rate futures, and foreign exchange futures of sterling, Swiss francs, German marks and Japanese yen.
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. After 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.
LIFFE is characterized by fewer individual investors among market participants, so the purpose of trading is mainly hedging rather than speculation. This is mainly because there is an investment tax in Britain, that is, if the interest of a futures transaction exceeds 6,250 pounds, an investment tax of 15% will be levied on the excess.