The proposals will be subject to an extensive consultation with the LME membership and other interested parties, on the basis of a detailed consultation document. This process will begin shortly. Commenting today the chairman of the Exchange, The Lord Bagri, CBE, said: " The London Metal Exchange is the world's premier non-ferrous metals market. Its place in the world of metal is unrivalled because of the quality of its contracts, its closeness to industry, and its efficient operation. " We hold that premier position because of our ability to grasp new opportunities, and develop new ways of conducting our business, while keeping a firm hold of those elements that contribute to our success.
" Although we are unchallenged, we see the potential for improving our performance and taking advantage of new technology to ensure that our cost base is kept at a low level. Hand in hand with the application of new technology, through the development of an electronic trading system, the board, assisted by a committee of practitioners, believes that the governance structure of the Exchange needs to be streamlined.
" The approach we are adopting is one of 'modernise and maintain' and it is very much the model which has been developed by our practitioner committee. In a fast changing world the Exchange needs to be able to act speedily to reinforce and develop its position and the range of contracts it offers. Equally, it must retain all that has made it the world leader for so many years. "
Speaking about technological change, the LME chief executive, David King said: "The board, again advised by the practitioners, has agreed that an electronic trading platform should be built and implemented for use outside of ring trading times. The system will be further developed in line with the ongoing needs of LME members and clients, ensuring that the Exchange remains at the forefront of the industries it serves. The precise specification of the system is in the process of being finalised, as is identification of the preferred supplier. The Exchange is well placed to do that in the weeks ahead, having spent considerable time examining the great variety of options available. Further the board itself has had the opportunity to hear at first hand the views of a number of possible suppliers."
Continuing his remarks The Lord Bagri, CBE said: " In terms of governance matters, the board believes that the LME should restructure to give the board the opportunity to concentrate on more strategic matters, with the executive given more responsibility, with the input of industry, to ensure the success of day to day trading activities.
"The board is determined that the LME should maintain its closeness to industry and will propose that there is proper representation on a restructured board. The board will propose to the members that the Exchange becomes a shareholding entity. The final details of the proposals have been delegated to a committee under my chairmanship. We intend to consult with the regulatory authorities, and aim to issue a consultation document to our members within the next few weeks.
" The board of the LME and I believe that the proposals we shall consult upon shortly will meet our high aspirations, and reinforce the position of the Exchange for the benefit of the market for many years to come. " The board is very appreciative of the very valuable contribution made by the practitioner committee in this process."
