Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Wells Fargo Said to Consider LME Membership to Expand Clearing

Don't Miss Out —
Follow us on:
Wells Fargo Bank Branch
Wells Fargo & Co. has joined at least one exchange this year and may become members of others so it can clear securities or derivatives traded on those marketplaces. Photographer: Patrick T. Fallon/Bloomberg

Nov. 27 (Bloomberg) -- Wells Fargo & Co., the U.S. lender that’s building its investment-banking unit, is considering applying for membership to the London Metal Exchange so it can clear more trades for clients, according to two people with direct knowledge of the plans.

The bank is seeking to become a Category 2 member of the exchange, said one of the people, who asked for anonymity because Wells Fargo hasn’t applied yet. The San Francisco-based firm probably won’t seek a Category 1 membership, which would allow it to trade on the floor of the world’s biggest industrial-metals market, the person said.

Wells Fargo has joined at least one exchange this year and may become members of others so it can clear securities or derivatives traded on those marketplaces. In January, the CME Group added Wells Fargo as a member so the bank could handle futures and options clearing. Adding London would allow the firm to take orders for the purchase or sale of contracts linked to metals from copper to aluminum.

Elise Wilkinson, a company spokeswoman, said the bank had no comment and declined to make executives available for an interview. George Simonetti, who is leading expansion of the clearing business, said in a June 4 statement that “clients will continue to need access to clearing venues globally.” He reports to markets division co-heads Walter Dolhare and Tim Mullins.

LME Roster

Wells Fargo would join at least 31 other LME members listed as Category 2, entitled to trade electronically and by telephone. They can also issue LME contracts and are members of LCH.Clearnet Ltd., the LME’s clearinghouse, according to the exchange. Citigroup Inc., Barclays Plc and Bank of America Corp. also have units listed as Category 2 members.

The firms are restricted from trading on the floor of the exchange, known as the ring, which is reserved for Category 1 members such as JPMorgan Chase & Co.

About 5 percent of transactions take place in the ring, excluding phone trades that are based on ring prices, while electronic trading accounts for as much as 40 percent of LME volume and phone orders have a share of as much as 50 percent, according to the exchange.

The LME, founded in 1877, accounts for more than 80 percent of global metal-futures trading and operates London’s last open-outcry trading floor.

To contact the reporters on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net; Dakin Campbell in New York at dcampbell27@bloomberg.net

To contact the editor responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.