LIFFE and Nasdaq Form Partnership to Offer Single Stock Futures In U.S. and Europe
Thursday, March 22, 2001
New York, NY—The Nasdaq Stock Market®, the world’s leading electronic stock market, and
the London International Financial Futures and Options Exchange (LIFFE), the world’s leading
electronic derivatives exchange, announce a partnership to develop the single stock futures
market, based on global stocks, for US and European customers. These products will be
listed on LIFFE CONNECT™, LIFFE’s electronic trading platform.
Nasdaq and LIFFE are setting out to utilise their powerful combination of strengths and skills
to lead the development of single stock futures in the US market and to further develop the
European market.
Later this year, regulatory changes for the first time, will enable US investors to trade single
stock futures. Nasdaq and LIFFE will form a US-regulated entity, which will list single stock
futures on global companies through LIFFE CONNECT™, for trading by US customers. In a
unique partnership between cash and derivatives markets, Nasdaq and LIFFE will provide
single stock futures in the US and Europe on a wholly electronic platform. They also intend to
develop links with US and European clearing organisations to maximise efficiencies for their
customers.
Frank G. Zarb, Chairman of Nasdaq, noted: "This partnership moves Nasdaq into a market
segment which is new but consistent with our global programme. We expect these
instruments to become important investment vehicles in the United States and Europe. This
transatlantic partnership opens new opportunities for both Nasdaq and Liffe -- it gets us to
market faster and positions us well to offer state-of-the-art electronic trading to investors in
both the U.S. and Europe. We chose LIFFE CONNECT™ because it is the most advanced
electronic derivatives trading system in the world, already proven to trade the most complex
financial contracts, including Universal Stock Futures. It has an unrivalled distribution network,
being available in more countries than any other electronic trading system."
Brian Williamson, LIFFE’s Chairman said: "Anticipating the growth in global equity trading,
LIFFE pioneered the development of futures on global stocks with the successful launch of its
Universal Stock Futures earlier this year. Our partnership with Nasdaq, a giant in the equity
world, enables us to build on the momentum we have already achieved. The strength of
Nasdaq’s brand and its pre-eminent position in the US equity market will make our single
stock futures offering a compelling choice for both retail and institutional customers in the US,
as well as in Europe and beyond. As a first step, LIFFE and Nasdaq together are taking the
revolution which LIFFE started, to the biggest capital market in the world, the United States of
America."
John Hilley, Chairman and Chief Executive Officer of Nasdaq International Inc. said: "The world
is moving rapidly toward electronic trading across a wide array of financial instruments. At the
same time, geographic barriers are coming down. This partnership is an important and tangible
step in both directions -- bringing more products and choices to investors in the United States
and Europe."
Hugh Freedberg, LIFFE’s Chief Executive said, "Our partnership with Nasdaq represents a
significant milestone in realising LIFFE’s ambitions to become a leading provider of electronic
market solutions. Nasdaq can be justly proud of its reputation as an innovator and leader in
electronic stock market trading. Its choice of LIFFE CONNECT™ is a major endorsement of
our trading platform and technology capabilities."
Notes to Editors:
1.The Nasdaq Stock Market lists nearly 4,700 companies, has a larger dollar volume, and
trades more shares per day than any other U.S. market. For more information about
Nasdaq, visit the Nasdaq Web site at www.nasdaq.com or NewsroomSM at
nasdaqnews.com
2.The London International Financial Futures and Options Exchange (LIFFE), established
in 1982, is one of the world’s leading markets for exchange-traded derivatives. The
Exchange is the world centre for euro money market derivatives, with 98% of the
benchmark euro interest rate contract and offers a wider range of products traded
electronically than any other global exchange. Through the most advanced electronic
trading platform - LIFFE CONNECT™ - LIFFE’s customers have the flexibility and the
opportunity to trade how and where they want, on a system uniquely configured to their
own particular needs. Every day £336 billion ($477 billion) is entrusted to LIFFE
CONNECT ™ -- more than any other electronic exchange in the world. LIFFE
CONNECT™ is the most widely available trading system, located in 385 sites in 23
countries worldwide. For more information about LIFFE, visit the LIFFE web site at
www.liffe.com.
3.Single stock futures have been prohibited in the US for 19 years. Following LIFFE’s
announcement that it would list Universal Stock Futures in September 2000, the US
regulators announced a week later they would repeal the Shad Johnson Accord
enabling US investors to trade single stock futures. The date from which they will be
able to trade has been set as 21 December 2001.
4.LIFFE listed 25 Universal Stock Futures in January this year, including five on
US-based stocks. The products have had an average daily trading volume of 5,000
contracts, the equivalent of 1.6 million underlying shares. Open interest in Universal
Stock Futures has steadily grown and reached almost 45,000 contracts before the first
expiry. The Exchange listed a further five Universal Stock Futures on Monday 19 March
and will list 10 more on Monday 2 April 2001.
5.LIFFE CONNECT™ can now be accessed from over 380 sites in 23 countries across
all three major time zones.
6.Ten years ago, the US equity market was worth US$3.5 trillion. It has now grown to
US$15 trillion today. |
