The London Clearing House (LCH) acts as the central
counter party for all trades executed on the LIFFE exchange, and is
contractually obliged to ensure the performance of all trades registered by its
members. Only LIFFE shareholders can apply to become LIFFE clearing members,
subject to their also applying to become LCH members.
Apart from LIFFE's internal regulations on members'
financial resources, staff competency and systems suitability, a considerable
body of United Kingdom legislation governs the general trade on futures markets.
The Financial Services Act 1986 requires, among other things, every person
dealing with the futures-trading public to register with the Securities and
Futures Association. This is a self-regulatory body created by the Act that
seeks to assure the financial viability of all exchange members. The Financial
Services and Markets Act 2000, which came into force on 1 November 2001, sets
still more requirements
On a day-to-day basis, the LIFFE trading platform
not only provides perfect price transparency but, like the Bolero electronic
documentation system, it records each and every trading move made by members
accessing the system: the time, what was done, and by whom.