The London Metal Exchange is in flux after the departure of CEO Garry Jones at the beginning of the year. That leaves interim CEO Matt Chamberlain with structural problems to address and a “hugely ambitious” deployment plan for 2017. In this JLN Exchange Leader Video, Chamberlain outlines these plans and the existential issues facing the exchange.
The highlight for LME in 2016 was LME’s steel scrap and rebar contracts. Introduced in late 2015, the contracts picked up traction in 2016. LME wanted to avoid shoehorning new products into their preexisting contract format. The steel contracts were a departure from the norm for LME as they are cash-settled against an index rather than physically delivered.
That contract alteration is just one hint at LME’s desire to listen to clients and end users about how they think the exchange would best function. Chamberlain is open about the questions surrounding LME’s market structure and wants to get input on how to fix them but said that LME can’t commit to a strategic direction until a permanent CEO is in place.
But there is plenty to keep the exchange busy in the interim. In H1 2017 the exchange is rolling out a new version of its trading system, LME Select, a new version of its matching system, LME Smart, and LME Clear will be delivering a new version as well. To top things off, LMEprecious, the exchange’s attempt to tap into London’s OTC bullion market with futures, launches on June 5. With MiFID II on the horizon, LME also needs to ensure it is completely ready to comply with the new rules.