The London Metal Exchange’s chief Matt Chamberlain today said that the bourse will cut fees and charges for certain trades in an attempt to reverse a decline in its market share since it hiked trading costs two years ago.
The move marks a climbdown for the LME and its parent company Hong Kong Exchanges and Clearing, following plans by its former CEO Martin Abbott to launch a rival trading platform to compete with the 141-year-old bourse. The new platform, called NFEx Markets, will start in the first quarter of next year.
The new proposal introduces a cut to fees on short- and medium-dated carry trades starting from October 1. These carriers are used by the bourse traders to roll expiring contracts forward in the near term. In addition, LME’s CEO said that the exchange discussed plans to propose new charges of dealers issuing OTC contracts that settle against LME prices.
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Chamberlain, who took over as head of LME following the departure of Garry Jones, said: “I hope we’ve now found the right balance to go forward together,” Chief Executive Matt Chamberlain told a briefing, announcing results of a discussion paper released in April. We hope the market will work with us on the basis of this lower fee schedule to bring their business back.”
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.