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Euronext.Liffe ready to launch off-exchange USF trading facility

Pan-European derivatives and stock exchange Euronext.Liffe is tomorrow set to launch a matching facility that lets institutional customers pre-negotiate bi-lateral trades on universal stock futures (USF).

    • John Ferry
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The facility will be available for 297 USFs – Euronext.Liffe’s version of single-stock futures – by the end of the year, said the exchange, adding that it will be extended to include further contracts on other international stocks next year.

“The facility offers a substantial reduction in counterparty and credit risk not normally available when trading off-exchange,” said Euronext.Liffe.

Euronext.Liffe announced the launch of the new trade matching system in September. At the same time it said it intended to launch a facility for providing institutional customers with tailor-made individual equity options contracts from January. It also aims to have a trade administration and clearing facility for over-the-counter equity derivatives in place by the end of the first quarter 2004. This too will be aimed at institutional traders.

Barry Marshall, chief operating officer of the investment division at Gartmore Investment Management, said “best execution” is an “essential criterion for managing clients’ money”. “The capability to use the match product could become as useful an objective measure of a fund manager’s implementation ability as the possession of a genuine electronic order management system,” he said.

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