London Metal Exchange Said to Consider People for CEO
The London Metal Exchange, the largest industrial-metals futures bourse, is considering three people for the role of chief executive officer, according to two people familiar with the process.
They are Diarmuid O’Hegarty, the LME’s chief operating officer, Garry Jones, the former CEO of NYSE Liffe, and Martin Pratt, the chief operating officer of Triland Metals Ltd., said the people, who asked not to be identified because the information is private. The new CEO will succeed Martin Abbott, 53, who said in June he would leave at the end of the year.
The LME was bought by Hong Kong Exchanges & Clearing Ltd. (388) last year for $2.2 billion. Abbott became CEO in 2006, overseeing a period of expansion that drove annual trading to $14.5 trillion from $4.5 trillion in the year before he took over. The 136-year-old exchange counts Goldman Sachs Group Inc. and JPMorgan Chase & Co. among its members and Triland is one of 11 companies that trade in the LME’s open-outcry ring.
Miriam Heywood, a spokeswoman for the LME, and Jones declined to comment yesterday. Pratt didn’t respond to phone calls and an e-mail seeking comment yesterday and today.
O’Hegarty was appointed COO of the LME in March after five years as deputy CEO and also served as executive director of regulation and compliance. He joined the exchange in 1998 after serving in the policy and legal department at the U.K.’s Securities and Futures Authority and working as a lawyer in Dublin and London.
Jones, who also was head of global derivatives at NYSE Euronext (NYX), stepped down in 2012 after five years. NYSE Euronext, owner of Liffe, is being bought by IntercontinentalExchange Inc.
He joined NYSE Euronext from ICAP Plc, where he led the interdealer broker’s European electronic-broking business, and also worked at BrokerTec Europe, a fixed-income trading system owned by investment banks. Jones worked in the financial industry for about 30 years, including at Daiwa Securities, BNP Paribas SA and Bankers Trust.
Pratt has been COO of Triland, owned by Mitsubishi Corp. (8058), since 2007. He was previously the trading director at Natixis Commodity Markets Ltd. and also worked at Sucden Financial Ltd. He serves on the LME’s user committee and heads its trading committee.
The LME handles more than 80 percent of trading in nonferrous metal futures and has a network of more than 700 approved warehouses. Prices of the six main metals on the exchange dropped this year, led by nickel’s 16 percent decline.
Hong Kong Exchanges CEO Charles Li is overseeing the LME’s push into China, the world’s second-largest economy and the largest consumer of industrial metals. The LME, which already lists Taiwan as a storage point, wants to be able to license warehouses in mainland China.
Having depots in China is part of Li’s strategy to create an “East Wing” for the LME by easing restrictions for traders in China and amending contracts and clearing to attract Asian clients. Li said in an interview in February that he wants to “use the LME as a catalyst to achieve a breakthrough in the barrier between China and the rest of the world.” The bourse signed a memorandum of understanding with Bank of China in June on clearing of yuan-denominated commodity products.
Li is expanding a strategy that began before last year’s acquisition. The LME opened a Singapore office in 2010, its first in the region, and introduced Asian benchmark prices for copper, aluminum and zinc in 2011. Transactions in Asian hours accounted for 16 percent of electronic trading in three-month futures in 2012, according to the LME.
The LME is also building its own clearinghouse, known as LME Clear, to boost revenue and introduce new products. The bourse will move to its own platform in September next year. LME Clear will have a capability to clear renminbi-denominated contracts, Li said in June.
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