INTERVIEW - New LME ring designed to safeguard its future - LME officials

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Kathleen Retournekathleen.retourne@fastmarkets.comJoint News Editor - Europe+44 (0) 20 7337 2144

London 12/08/2015 - The London Metal Exchange (LME) is in the process of kitting out its new headquarters, which will include dedicated space for the open-outcry ring, the design of which will be set-up to ensure longevity, LME officials told FastMarkets on Wednesday.   

 “We could build a like-for-like, but obviously we are building for the future as well. So there are going to be changes that will safeguard and 'future-proof' the ring,” Peter Childs, head of price discovery said.

The layout of the trading floor is of particular interest to Category One membership companies - the only members allowed to trade in the ring. They want to ensure there is still privacy and security to trade - maintaining an unfettered line of sight is also of importance to those trading and communicating in the ring.

“The ring dealer members are very much involved in the project,” said Childs, adding that they have also had full engagement from trading directors and the ring committee, amongst others.

At present, the ring design process was “in a good stage,” he said.

The exchange has stressed that the ring – the lifespan of which is continuously called into question as markets become increasingly electronic and is the last of its kind in Europe – will be a key part of the new location at 10 Finsbury Square, in London's financial district.

The move is expected to take place in stages during the last quarter of 2015 and first quarter of 2016.

“We are going into a brand new space which is ready to be fitted out. It is not hugely complicated, but you have to plan right,” Stuart Sloan, chief operating officer and head of strategy said.

Due to the lease expiry, it may mean that there will be a period of time that ring trading takes place at its disaster recovery site, which is outside London.

“We have a recovery site for back-up testing twice a year, so there is the opportunity to use it,” Sloan said.

 “Because we are building a new ring, we take what we can, but there will be different red leather benches. It is not a case of just shifting stuff out on the Friday evening… we are of course aiming to minimise disruption to Category One members. [The recovery site] is a sensible suggestion,” Sloan added.

In December last year, the exchange said it was considering a move from its current location following an increase in staff numbers.

The LME has had three homes in its 137-year history - all in London's financial district. Its original location in 1882 was in purpose-built premises in Whittington Avenue, where it remained until September 1980. It then moved to Plantation House - half a mile away - in Fenchurch Street but outgrew that location within a decade. The move to its present headquarters in Leadenhall Street was made in 1994.

(Editing by Martin Hayes)



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