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HMRC internal manual

VAT Finance Manual

Financial derivatives: Trading on the London Financial Futures and Option Exchange ("LIFFE"): Background

LIFFE was originally set up in 1982 to deal only in financial futures and options. In 1992 LIFFE merged with the London Traded Options Market, in 1996 it merged with the London Commodities Exchange and then in 2002 it was purchased by Euronext. It is now known as Euronext.LIFFE.

LIFFE members trade standardised contracts. A feature of LIFFE traded standardised contracts are that all financial futures on-market transactions between a client and member or between two members, are always principal to principal.

Members of the exchange can be either:

  • a “floor” member (entitled to trade on their own account or on behalf of another member or non-member); or
  • a “local” member (registered to members of LIFFE who trade on own account, but may also trade on behalf of floor members).