Intercontinental Exchange (NYSE:ICE), a global network of exchanges and clearing houses, is in talks with Martin Abbott, the former CEO of the London Metal Exchange (LME), as the New York-listed group considers launching a new rival metals trading platform, according to a Reuters report.
Mr Abbott, a former journalist and broker, left the LME in 2013 after the Hong Kong Exchanges and Clearing (HKEx) took over the company. He personally made about $10 million from the $2.2 billion sale of the 135-year-old bourse to the Chinese rival, in a bidding process which included ICE. The former LME boss is a veteran of the metals industry, having led the London exchange for seven years before he left.
“ICE is looking at the possibility of expanding into metals (in London). We’ll look at it if it develops further. Any loyalty we had (to the LME) went a long time ago when they raised fees at a very difficult time for us,” the source said.
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Customers look at rival platforms
There are a number of different options for how exactly the metals might be traded on the new London-based platform, as some people talk about an OTC (over the counter) platform, while others suggest a full-blown exchange. “A combination of physical and cash-settled contracts perhaps might work,” one source close to ICE said.
Back in January, the LME announced the departure of its CEO Garry Jones, who also retired from all his positions within the HKEX Group including his roles at the LME and LMEC.
Mr Jones’ retirement comes after a challenging year for the world’s leading metal exchange which saw its trading volumes dropping by nearly eight percent in 2016. This was due to a revolt by its members after the London exchange hiked fees by 31 percent in January 2015. The step prompted consumers and producers to favour OTC trading and even considered setting up a rival exchange, hitting LME volumes.