China’s influence continues to grow in Europe as the London Metal Exchange (LME) bags its first Chinese owned brokerage. GF Financial Markets (UK), an FCA regulated broker that is part of an international Chinese owned firm has joined the historic metals trading venue.
The Hong Kong Exchange’s acquisition of the LME in 2012 came with much scrutiny as participants were cautions that the deal would not blossom, however the latest approval of GF Financial Markets as ring dealing member highlights the long-term scope of the deal that was valued over £1.4 billion. The acquisition was expected to boost commodities trading on the London bourse from China.
GF Financial Markets is a subsidiary of GF Group, a Chinese owned firm with a range of financial services firms based in the Hong Kong offering; equities and commodities brokerage and asset management.
Garry Jones, chief executive of the LME commented about the new member in a statement to the media: “We welcome GF Financial Markets to the Ring and look forward to expanding our client base further, particularly in the Asia region.
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Our growing membership shows confidence in our markets and a growing interest in risk management from the global metals industry.”
GF Financial Markets will be approved as a ring dealing member, under their permission, the firm will be able to trade in LME Select and the telephone market, in addition the firm will be able to buy and sell material for their clients.
GF Securities, the equities broking unit of GF Group had acquired Natixis, a French bank, commodity division during the summer of 2013, Natixis withdrew its LME membership in 2012.
The latest move highlights the changing landscape in global commodity trading, Asia firms, who are strong producers and consumers of commodities such as precious and industrial metals are shifting the balance and overtaking Europe’s position in the sector.
GF Securities is one of the largest brokerage firms in China. Till date, a range of international firms from Indonesia, India and Japan have been migrating their business under the FCA. According to GF Financial Markets permission on the FCA register, they are able to offer CFDs and financial spread betting, in addition to futures and options traded on the LME.