40 Years Later: A LIFFE Story
Last day of trading at the Royal Exchange 13 December 1991. (Photo Courtesy ICE Archives)

40 Years Later: A LIFFE Story

It’s curious that there are zero official celebrations in the air this week but 40 years ago today the then Bank of England Governor Gordon Richardson cut a ribbon hanging in the Royal Exchange and ceremonially pre-empted the first bell being run to start trading.

From there on, the City of London’s presence in derivatives, already on exchange in commodity forms at various venues, had entered the ‘modern’ (what I prefer to term “Sandorian”) era of markets. Across the road, the options traders added some colour to the suits on the LSEG (London Stock Exchange Group) floor but soon LIFFE had captured the imagination as the dynamic market right in the heart of a building rebuilt often since being originally constructed by Sir Thomas Gresham and opened by the original Queen Elizabeth in 1571.

HRH Queen Elizabeth II would, as I noted the other week, visit LIFFE when it moved to CannonBridge on 11th February 1992. Throughout both incarnations of the LIFFE floor, the whole market was a thriving hotbed of international trade. Originally it copycatted key US markets and added the British yield curve as well as currencies but soon it would develop into UK stock index futures and much more.

I was not there on day one - relieved to say I was far too young! - but it was a fantastic place to learn markets, make friends and experience something which digital markets still cannot replicate, the cacophony of thousands of voices seeking to make markets and bring Liquidity, Accessibility and Transparency to the world.

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LIFFE was founded after IPE, LFOX and LME within the Square Mile and it followed the great floors of Chicago and New York as major titans of exchange commerce and it lives on to this day trading via the ether as a balance sheet powerhouse within the magnificent portfolio of ICE.

Of course, the lesson to take away from this episode is that with the rose tint of history it all looked obvious. Futures were a great idea that succeeded on a smooth ar oc acceptance to become mainstream. Yet (as the British government has been discovering this week) the force of reaction is powerful within the establishment and even when LIFFE traded its 1 millionth contract on August 5th 1983 and 2 million by March 9th 1984, there were still vast swathes of cynicism. Cofounder and twice Chairman of LIFFE Sir Brian Williamson used to note that The Economist Magazine took years to stop dismissing the concept of LIFFE for instance before finally getting on board with the success of exchange traded derivatives years after the reality was voluminously obvious.

After 4 decades of success, it appears LIFFE is enjoying a somewhat muted anniversary but those who worked on the floor or for the exchange itself retain a remarkable unifying bond and later today I am sure I will not be alone in raising a glass to a great market that did so much to accelerate the world of derivatives trading. It’s a great lesson in vision (thanks to all who persevere and built the original market - even when the Bank of England was itself cynical it would work) and a very useful lesson concerning a rather low latency media / public opinion forming process and the wider blob whose short-termism cum narrow minded perspectives on the future usually involves a rush to judgement before the facts have been established.

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Craig Burridge

Electrician at SPAFORD ELECTRO AND MECHANIC SERVICES LIMITED

1y

I agree with the above what a fantastic place to work, I was part of the fantastic engineering / operation / facilities team and made friends for Life and achieved nearly 26 year’s some of the guys are still working for ICE but what a place to work very good memories

Nick Weinreb

Regulatory Consultant and Former Group Head of Regulation at Euronext

1y

Working at LIFFE, particularly in the floor days, was a truly unforgettable experience.

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John N.

Tentacle Web Design

1y

Wow – 40 years ago.  A nice post to read. A number of us merged with LIFFE from London FOX / The LCE (ATS / ODS & FAST in the late 80's / 90's - Commodity Quay) and into LIFFE in 1996.  I had the pleasure of working with a number of great people at LIFFE with fantastic and committed people. It could be very long days and hours at times, but always remained an enjoyable place to work for me. I left with fond memories and still keep in touch with a few. After reading this post, I thought I would look up Dave Stephens (@ the LCH - I am sure a number of us had many dealings with Dave - he always seemed to be at the LCH, no matter what time you called after the markets closed at the FOX / the LCE), Nice to see Dave finally retired and now does volunteer work for the National Trust.

Mike McErlean

Co-Founder at Meetingmap

1y

Honored to have served on the LIFFE Board during a very difficult time for the exchange when Sir Brian Williamson came back for his second iteration. Agree with David Hardy regarding the contributions of so many more at the exchange (and clearing house!). While my career in London only was from '97 to '03 I always appreciated dealing with Juliet Proudlove, who served as a kind of gatekeeper to Sir Brian at that time. She had an impact that was comparatively outsized to her job title (or her physical stature), wonderful lady that embodied the "can do" spirit of the exchange during my time there.

Loved the buzz when I used to go down to the floor.

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