Jefferies Aims to Be One of Top Five Brokers on the LME

Jefferies Group Inc. (JEF), the investment bank that bought Prudential Bache’s commodities business, wants to be one of the five biggest brokers on the London Metal Exchange after starting on the floor yesterday.

Jefferies Bache Ltd. aims to be in the top five by transaction volume, Richard Khaleel, a Jefferies spokesman, said by phone yesterday. New York-based Jefferies joined 11 companies including JPMorgan Chase & Co. (JPM) and Barclays Plc entitled to trade in the so-called ring, London’s last open-outcry trading floor. Jefferies doubled metals staff to about 50 people since June when it hired Michael Frawley as global head of metals and listed products, Khaleel said.

The LME handles about 80 percent of global trade in metals futures, with trading last year valued at $15.4 trillion. Jefferies, under Chief Executive Officer Richard Handler, added more than 400 employees through its purchase of the Bache unit, which was completed in July 2011. The company was previously a Category 2 member, limited to trade electronically and by phone.

Trading Team

Jefferies hired 13 former Natixis Commodity Markets Ltd. people, most of whom are ring dealers, Frawley said. Nine people from the company have been authorized to trade on the floor of the LME, the exchange said Aug. 31. Newedge Group SA brokers Joel Spier and John Peiser were hired in New York while Steve Pettitt joined in London and Tiger Shi and John Browning are in Hong Kong.

Metal prices more than tripled in the past decade as demand from emerging markets led by China overwhelmed supplies from mines. The LME’s members last month approved a $2.2 billion takeover from Hong Kong Exchanges & Clearing Ltd., which pledged to keep the London bourse’s ring and system of establishing metals prices until at least 2015.

The exchange’s Category 2 members include Credit Suisse Group AG, Citigroup Inc., Deutsche Bank AG and Goldman Sachs Group Inc., according to its website. Natixis ended its Category 1 membership on July 27 and became a Category 2 member.

To contact the reporters on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net; Maria Kolesnikova in London at mkolesnikova@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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