The London International Futures and Options Exchange (Liffe) is one of Europe’s leading derivatives markets and home to trillions of pounds of trading every year in financial products such as interest rate and gilt futures. Liffe’s owner, NYSE Euronext, is set to be taken over by American financial group IntercontinentalExchange (ICE).
ICE is considering moving the exchange’s trading systems from London to Atlanta, according to sources close to the talks.
Moving Liffe to Atlanta could save ICE about $ 30m (£20m), but many of the exchange’s customers fear the transfer could lead to many London-based traders abandoning the market.
According to one senior trader, the move could add 100 milliseconds to trading times, rendering many firms uncompetitive, as these tiny time margins can mean the difference between making and losing millions of pounds in trading profits.
“Everyone I’ve spoken to said they would be mad to go ahead with this move,” said a trader.
ICE is currently discussing the move with staff at NYSE Euronext as it looks for ways to save money.
A spokesman for ICE said, “no plans to move technology infrastructure have been made”.
The loss of Liffe would represent a blow to London’s place at the centre of the global financial trading system and could open the way for rivals to take business away from the exchange.