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.
China expert not a requirement for next LME chief
The replacement being sought for the outgoing London Metal Exchange (LME) chief executive Martin Abbott does not need to be a China expert, say sources at Hong Kong Exchanges and Clearing.
Abbott resigned last week and will leave at the end of this year, and an HKEx source said the bourse has appointed headhunting firm Spencer Stuart to conduct a search for a successor.
"The HKEx would not require candidates for the post to be able to speak Putonghua. Neither will he or she need to be a China expert. What is more important is that he or she must manage the London market smoothly and be someone who is acceptable to the British regulator, the Financial Services Authority," the source said.
"It is more important that we can show China that the LME is a well-run organisation offering a professional commodities trading service. This is the only way we can sell the LME story to China to require the mainland to adopt a policy that can help Hong Kong to develop its commodities trading."
Since the HKEx has more than 20 years of experience lobbying mainland officials, and Hong Kong government officials also helped to lobby the mainland government to support the development of commodities trading here, it did not need the new LME chief to do the job, the source said.
Christopher Cheung Wah-fung, legislator for the financial services sector, agreed that the LME chief executive should be someone who knew how to deal with international traders.
Jerry Chang, managing director of headhunter Barons & Co, said Hong Kong and the rest of Asia did not have candidates with experience of running commodities exchanges.
"Most commodity trading is done in London, New York, and Chicago. To find someone to run an international exchange such as the LME, the HKEx will need to recruit talent in either the United States or London, or make an internal appointment from LME staff," he said.