- Decision follows six-month review and extensive discussions with the market
- Investing £1 million in Ring-based technology in 2014
- Further integration of electronic and Ring pricing
- Focused on keeping the Ring relevant and able to suit market’s needs
The London Metal Exchange (LME) today announces its decision to maintain and further invest in the Ring, the Exchange’s open-outcry trading floor, following a six-month internal review and extensive discussions with market participants.
The Ring is a robust price formation venue that provides a transparent price-discovery
process and supports a unique daily prompt structure. It has serviced the global metals
industry for 137 years, and is Europe’s only remaining open-outcry trading venue.
“The LME will continue to host the Ring, with its robust and transparent price-discovery
process, for as long as the market needs it,” said Garry Jones, CEO of the LME and Co-
Head of Global Markets at Hong Kong Exchanges and Clearing (HKEx).
“Our review has highlighted areas where we can enhance the Ring and increase its
efficiency alongside the LME’s other trading venues. We will be particularly focused on
further aligning it with our electronic trading venue, LMEselect, and on ensuring that it
continues to meet global standards for transparency, integrity and governance.”
In 2014, the LME is investing £1 million into Ring-based technology. New wall boards will
be fitted on the trading floor with enhanced technology to help integrate Ring and
LMEselect pricing and to facilitate business conducted in the Ring.
“While we value the Ring’s long and distinguished history, we are conscious that we need
to continue to keep it relevant for the global market and able to serve its needs. We will
work with users to further enhance Ring-based trading to keep pace with the rapidly
changing marketplace and generate more volume,” said Jones.
Since 2010 the LME has introduced more than 20 new rules to ensure that its price
discovery process remains as efficient as possible while servicing members and their
clients in an evolving trading landscape. In 2013, the LME doubled the seating capacity for
Ring-dealing members to cater for floor teams, which have expanded to meet the needs of
clients who increasingly wish to be serviced from the Ring.
In 2014, the LME concluded, through an internal audit, that the Ring meets the IOSCO
Principles for Financial Benchmarks. The LME remains committed to ensuring adherence to
global standards for transparency, integrity and governance, and will continue to conduct
internal and external audits on all its trading operations on an ongoing basis.
The review of the Ring took place as the LME looks to leverage business opportunities
following its acquisition by HKEx in December 2012. More than 25 stakeholders participated
in the review, including all 11 Ring-dealing members and several industry trade bodies.
