London Metal Exchange
Set up in 1877 to provide a venue for trade conducted among metal merchants in London, the LME was sold in 2012 to the operator of the Hong Kong stock exchange. In 2013, it was a defendant in lawsuits accusing Goldman Sachs, JP Morgan and Glencore-Xstrata of rigging the aluminium market.
LME rolls out electronic network to speed up trade with Asia
The London Metal Exchange has teamed up with technology firm Colt Technology Services to introduce an electronic platform called LMEnet to facilitate faster and easier trading of its products for brokers and investors in Hong Kong and the Asian region.
"We have invested a significant amount in technology over the past 12 months, with more than £30 million (HK$396 million) devoted to [information technology] projects and systems development, excluding LME Clear," said Robin Paine, the chief technology officer of LME, the world's largest base and industrial metals exchange.
"In partnership with Colt, we are delighted to be able to offer LME market participants enhanced performance and availability in their connectivity to the exchange."
The LME is the latest exchange to promote a cross-trading connection.
LMEnet will allow Hong Kong and Asia brokers and investors to connect directly to the LME network to trade its benchmark products such as copper, zinc, lead and aluminium contracts, among others.
Colt is a technology firm that specialises in establishing networks to link exchanges in Europe and Asia, such as the Chicago Mercantile Exchange, Eurex, and SGX in Singapore.
Jay Hibbin, the commercial director of MarketPrizm, a subsidiary of Colt, said LMEnet would facilitate faster and easier trading between Hong Kong and London.
"Our network would provide brokers a reliable and quick way to conduct cross-trading," Hibbin said. "China is the driving force for Hong Kong to develop its commodity market.
"Investors from the mainland would like to trade … the LME products to hedge their risks."
The LME expects to move users to the new system within nine months, with migration slots available from October.
The LME allows brokers to trade through floor trading in the "ring" area in London, by telephone or electronic trading. Last year, US$14.6 trillion worth of contracts were traded at the LME.
The platform was set up just as the LME is gearing up for a roadshow in Tokyo in September to expand its Asian investor base.
In April, LME chief executive Garry Jones told the South China Morning Post the exchange was exploring a potential alliance between the LME and the mainland commodity exchanges in Shanghai, Dalian and Zhengzhou.
Hong Kong Exchanges and Clearing, the local bourse operator which acquired the LME in December 2012, will tie up with the Shanghai Stock Exchange in October for cross-border stock trading.
The HKEx has also forged ties with the Singapore Exchange and Tokyo Commodity Exchange to promote derivatives trading.