Liffe attacks plan on disclosure rules

THE London International Financial Futures Exchange (Liffe) yesterday attacked a proposal from the Stock Exchange to allow market-makers up to five days' grace before they make public very large share trades.

Trades of large bundles of shares that are at least 75 times bigger than the individual stock's average trade - the so-called 'normal market size' - would no longer have to be made public 90 minutes after they take place, under the exchange's proposals. They are set to come into effect this year subject to approval by the Office of Fair Trading.

The Stock Exchange said yesterday that such a move would help market-makers to execute very large trades and boost liquidity for second- and third-line stocks.

But Liffe said: 'The market should move towards greater transparency. Instead, the proposed arrangements represent a move in the opposite direction, towards a reduction in transparency and even more imperfect information across participants.' Some market-makers yesterday also attacked the proposals as favouring inefficient firms.

Last year a number of large City market-makers suggested to the Stock Exchange that share trades more than 10 times normal market size should be shielded from the public gaze for five days.