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London Metal Exchange CEO Matthew Chamberlain speaks during LME Asia Week in Wan Chai in 2018. Photo: Xiaomei Chen

LME CEO Matthew Chamberlain to stay as bourse recovers from nickel chaos

  • Matthew Chamberlain had announced plans to leave in May for Komainu, a custody business for digital assets
  • Decision to stay follows a chaotic period that saw nickel trades cancelled, week-long suspension
London Metal Exchange CEO Matthew Chamberlain will stay in his role, abandoning a plan to leave in May as the 145-year-old bourse tries to recover from a chaotic period in nickel trading that tarnished its reputation, the exchange said on Wednesday.

Chamberlain announced in January that he was planning to step down next month for a top role at Komainu, a custody business for cryptocurrencies and other digital assets backed by digital asset firm CoinShares, crypto-wallet company Ledger and Nomura.

“Events of recent weeks have brought into focus the importance of the LME and the metals markets,” Chamberlain said in a statement. “I want to continue to work with the team on supporting the long-term health and efficiency of the market and drive forward the sustainable development of our industry.”

The decision comes after a challenging period for the LME, which is owned by bourse operator Hong Kong Exchanges & Clearing (HKEX), after it was forced to cancel trades and suspend nickel trading for a week in early March as a surge in prices threatened to destabilise the market amid a short squeeze that triggered billions of dollars in margin calls.

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Nickel prices, alongside other commodities, surged in early March following Russia’s invasion of Ukraine and concerns about supply shortages.

The chaos around nickel prices, which included a stop-start period over two days as trading resumed, damaged the bourse’s reputation, traders said, and potentially opened the door for competitors, such as CME Group in Chicago and the Shanghai Futures Exchange, to expand their market share.
Earlier this month, the Bank of England and the Financial Conduct Authority, Britain’s chief financial regulators, said they would conduct a review of the LME’s handling of the unprecedented suspension of nickel trading and its chaotic resumption.
In its Global Financial Stability Report last week, the International Monetary Fund said the LME needed to strengthen its governance mechanisms to avoid potential conflicts of interest. Traders have criticised the cancelling of trades, saying it favoured some investors over others.
Traders in the open outcry ring at the London Metal Exchange. Photo: AFP
Chamberlain has said greater transparency and more oversight is needed of over-the-counter positions held away from the exchange, a reform major banks lobbied against last year.
Chinese metals group Tsingshan Holding Group, the world’s biggest producer of stainless steel, built up a massive short position ahead of the surge in nickel prices and found itself facing about US$3 billion in losses.

The issues surrounding nickel trading followed a long-running campaign by Chamberlain to modernise the metals exchange and make it more attractive to hedge funds and other investors.

His reforms have included efforts to rein in more boorish behaviour by traders, including banning alcohol consumption during the workday and stopping companies from hosting LME Week-branded events at strip clubs and casinos.

Chamberlain, a former UBS banker who advised HKEX in its £1.4 billion (US$1.8 billion) purchase of LME, joined the metals exchange in 2012 as its head of business development before being promoted to CEO in 2017.

Following Chamberlain’s decision to stay in the CEO role, Adrian Farnham, the CEO of the LME’s clearing operation, will retire as originally planned in July, the LME said. Farnham had deferred his retirement to serve as interim CEO while the bourse searched for a successor to Chamberlain.

At the same time, Catherine Lester, the LME’s chief financial officer, is leaving to pursue interests outside the company after more than eight years with the bourse, the LME said.

Tabitha Silverwood, who is currently serving as acting CFO, will succeed Lester on May 1, the bourse said. Silverwood has been with the LME since 2014 and has served as head of finance since January 2019.

“I’m very excited about [news that Matthew is staying on]. Matthew is a first class professional, very well trusted by the LME board and has the full support of the board,” Nicolas Aguzin, the HKEX CEO, said during a briefing on the HKEX’s first-quarter results on Wednesday.

The issues in the nickel market “was something that was quite extraordinary and unprecedented in the market”, Aguzin said.

Additional reporting by Georgina Lee in Hong Kong

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